Canada ties are rocky, but your dal-chawal will be alright

The emergence of Australia as a viable source of pulses, as well as growing local production of the commodity, have brought relief for India, that has traditionally depended on Canada for the bulk of its lentils imports.

A murder in Canada last year has escalated into a diplomatic conflict between the two countries, casting a shadow over trade relations. According to two people aware of the plans, India may dial up imports of pulses from Australia which has already become the largest supplier of pulses.

“There is no cause for worry, as ample stock is available to meet domestic demand. Retail prices for lentils (masur) are above the minimum support price, which ensures that farmers are not facing any price distress," one of the two people cited above said, adding India is ready to double down the import of lentils from Australia, if needed.

Also read | Pulse of a nation: Of daal and strained international relations

India has traditionally banked on Canada for the bulk of its pulses imports. According to data from the department of consumer affairs, Canada and Australia accounted for 45.41% and 51.25% of India's lentil imports in 2023. The roles have switched this year, with Australia accounting for 66.3% and Canada 26.4%.

Australia's emergence as a viable alternative for Canada in pulses also comes at a time higher support prices for pulses has lifted domestic production. As of now, the stock of lentils in the country stands at about 800,000 metric tonnes.

As on 17 October, the average retail price of masur was ₹89.55/kg, which is much above the minimum support price of lentil fixed at ₹6700 a quintal. (1 quintal=100 kgs)

“Now, Canada is not the only importing destination for lentils, as several other countries have started growing lentils with India's demand for this essential commodity in mind," the second official said. “We are not dependent on only Canada for lentils. If they want to keep the trade activities as usual, they are welcome. We have assurances from other nations for lentil supply," this official said.

Multiple sources of import

Besides Canada, India imports lentils from Australia, Russia, Turkey, the USA, UAE, Singapore and Sri Lanka. However, the share of imports from these countries is much smaller compared to the quantity imported from Canada and Australia.

India’s total import of red lentils (masur) stood at 1.51 million tonnes in 2023.

India's consumption of lentils ranges between 2.6 and 2.8 million tonnes annually, of which 1.5 million tonnes are imported.

Also read | Kharif crop sowing exceeds average area driven by paddy, pulses, coarse cereal

Production of lentils, a winter crop, has risen from 1.1 million tonnes in FY20 to 1.79 million tonnes in FY24, representing a 62.4% increase over the last five years.

However, traders believe that India will still need to import lentils from Canada. "If the trade with Australia increases at the expense of Canada, it could disrupt trade dynamics, and Australia may impose its own terms," said Amit Goel, director, Agro Pure Capitals Foods Pvt. Ltd.

The ongoing diplomatic tensions would not have its impact on the trade of pulses, Goel said.

Ending dependence

The government has set a target to end its dependence on imported pulses by 2027, finance minister Nirmala Sitharaman said in her Union budget speech, where she stated that to achieve self-sufficiency in pulses and oilseeds, the government will work to enhance their production, storage, and marketing.

Recently, Commerce Secretary Sunil Barthwal had also emphasized that “the trade is conducted between private entities and will persist despite the diplomatic tensions."

As part of its ‘Atmanirbhar Bharat’ initiative, the Centre has launched the e-Samridhi portal through the National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED) and the National Cooperative Consumers' Federation of India Limited (NCCF). This portal facilitates the registration of farmers who are adopting crop diversification, particularly those cultivating pulses.

Also read | Govt directs big retailers to reduce pulses prices in line with mandi trends

The government has also assured that it will procure 100% of the pulses grown by farmers registered on the portal at MSP.

This ensures a secure market and fair prices for farmers, encouraging greater participation in pulse cultivation and supporting the nation's goal of self-sufficiency in food production.

“The bilateral pulse trade will continues to be ‘business as usual’. The diplomatic tensions will not impact the trade, said Bimal Kothari, chairman, India Pulses and Grains Association (IPGA).

Queries sent to the consumer affairs ministry remained unanswered till press time.

The India-Australia Economic Cooperation and Trade Agreement (ECTA) was signed in April 2022, while negotiations between India and Canada on the free trade agreement (FTA) were halted due to political tensions in September 2023.