Saskatoon | MarketsFarm — To Murad Al-Katib, the opportunities for Canadian pulse exports to India are amazing, provided one correctly understands the context of India’s tariffs on pulses.
Also, he said, those Canadian exporters must realize they need to switch from being solely dependent on commodities to adding value by shipping food and ingredients.
“We need to accept the reality that these tariffs are there and they are not going away,” said Al-Katib, the CEO of AGT Food and Ingredients, at the recent Grain World conference in Saskatoon.
India’s import tariff on peas is at 50 per cent and chickpeas at 44. Lentils are at 33 per cent, except those from the U.S., which are levied at 50, he said.
“Put it in place, reduce it, continue to collect billions of dollars and protect your domestic agriculture all at the same time. That’s the new reality,” Al-Katib said during his presentation Thursday.
Changes in those tariffs will inevitably be made by the Indian government, in accordance to how well the country’s domestic crops are doing. The better the crop, the higher those tariffs will remain, he explained.
After back-to-back years of good crops for India, Al-Katib said 2020 will likely be quite different due to the timing of the monsoons this year, as the season lasted much longer than normal.
“Up to 60 per cent of the October-November harvest was damaged,” he said, adding the extended rains also meant the planting of the next crops was late.
“The March-April harvest is the key harvest for Canada. That’s when [India] harvests lentils, chickpeas and pigeon peas,” Al-Katib commented.
Should there be a poor crop, the India government is likely to reduce its tariffs on pulses.
Also, Al-Katib doesn’t want Canada to remain an exporter of only commodities. He said India views Canada as another country that dumps its pulses on it.
“We have the opportunity to produce food, not just commodities, but getting out of the ‘commodities ghetto’ where we have no control,” he said.
The Indian market alone, he said, has about 400 million vegetarians with another 700 million people who also consume a tremendous amount of vegetable-based protein.
Furthermore, Al-Katib said Canada shouldn’t be just focused on India, but the entire Asian market as the continent’s ballooning middle class is projected to be spending US$33 trillion a year by 2030.
“There’s enough of the pie to go around for everybody,” he said.
— Glen Hallick reports for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.