Tariffs a poor end of year for pulse sector

Pulse industry weighs up implications of hefty Indian tariff on chickpeas and lentils

Not only were chickpea producers in the south subject to savage frost this year, there is now a heavy import tariff in India, Australia's largest market for the crop.

Not only were chickpea producers in the south subject to savage frost this year, there is now a heavy import tariff in India, Australia's largest market for the crop.


The Australian pulse industry has been dealt a savage blow with news of a whopping Indian tariff on chickpea and lentil imports.


THE AUSTRALIAN pulse industry could lose hundreds of millions of dollars in export income due to a decision by the Indian Government to impose a 30 per cent tariff on chickpea and lentil imports, effective immediately.

As industry tries to digest the implications of the decision, Pulse Australia’s short term priority is to ensure product currently en route to India is not subject to the tariff and is working with Australian Government to get clarity from India on whether consignments on the water on the way to India will be exempt from the impost.

Given the timing of the announcement, right as the first wave of 2017-18 Australian exports to India have been loaded and are on the water, there are an estimated 200,000 tonnes of pulses headed for India at present.

India is Australia’s largest market for both chickpeas and lentils.

The Indian decision has been made in order to try and curb a fall in prices which would hurt Indian farmers, following an improved season in terms of production after a run of below average years.

The chickpea and lentil tariff, which was announced on December 21, follows hot on the heels of 50pc import tariff on field peas.

Smaller tariffs has been imposed for other commodities such as wheat and palm oil.

Aussie pulse values have already tumbled, with desi chickpeas sitting around $600-650 a tonne delivered upcountry in most Australian regions, less than half the values at the top of the market mid last year.

It comes as a blow for growers who are yet to market this year’s crop, while the export sector will have to look for alternative homes for remaining chickpea and lentil tonnages.

Lentil crops will also be subject to the Indian tariff.

Lentil crops will also be subject to the Indian tariff.

Pulse Australia chairman Ron Storey said his organisation’s first priority was trying to ensure the product already exported but which had not arrived was not subject to the tariff.

“Pulse Australia believes the Indian Government ought to provide a tariff exemption on product on the water,” he said.

“Initial indications are that some 200,000 tonnes or around $150 million) of Australian chickpeas and lentils are in transit to India and may be affected.”

“The Indian Government should provide an exemption for Indian importers for product contracted and shipped prior to the new tariff being announced,” said Mr Storey.

“Indian buyers and Australia sellers have contracted in good faith, and the prior conditions should apply to permit smooth execution of those contracts.”

He said the Australian Government would work with Canada, another big exporter of pulses to India, on the matter.

In the longer term, Mr Storey said tariffs destroyed confidence in the sector.

“There is the longer term issue of the impact of tariffs on food security,” said Mr Storey. “While India strives for self-sufficiency in pulse production, most projections are that India’s reliance on imports for the foreseeable future must continue to guarantee the security of this vital protein source for the Indian population.”

Mr Storey said demand had emerged elsewhere for Australian chickpeas and lentils.

“Other markets such as Bangladesh and Pakistan have increased their demand and recent business will help the supply chain keep our exports moving,” he said.

From the farming sector, chairman of Grain Producers Australia (GPA) Andrew Weidemann said the move was a negative for all involved with the Indian pulse trade.

“The tariff is a backwards step for everyone involved in the supply and consumption of chickpeas and lentils in India,” Mr Weidemann said.

He said the move would ultimately be bad not just for exporters to India, but also Indian consumers and grain producers by virtue of artificially inflating pulse prices.

“Tariff barriers create disincentives for both marketers and growers, decreasing the incentive to grow the crop which will create severe shortages of product in adverse production years, with additional price impact for India’s domestic consumers.”


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