Pulse Market Insight #268 JAN 31 2025 | New Growers and Producers | Pulse Market Insights
India Situation Update
This is the time of year that we look more closely at the situation with Indian pulse crops, as the rabi season is when Indian farmers plant chickpeas, lentils and peas, the crops we’re more concerned about in Canada. Normally, the focus is on acreage and crop prospects. While those are still important, the added layer of government policy has become a key feature in the outlook. But let’s start with crop production.
This year, Indian farmers started the planting season on a strong note, with pulse acreage running ahead of average. There are some questions about the Indian reports, but they show very small gains later in the season, with total pulse acreage currently 11% less than last year and 12% below the 5-year average. According to these reports, Indian farmers have planted 24.4 mln acres of chickpeas (6% less than last year), 4.3 mln acres of lentils (down 11%) and 2.2 mln acres of peas (12% less).
Of course, acreage is only one part of the production equation. Across much of India, satellite vegetation maps show crop conditions are better than average, with the early harvest scheduled to begin in a few weeks. Keep in mind, conditions were very positive last year; comparing the vegetation maps against last year shows key growing areas in north-central India this year in worse shape. These two comparisons suggest 2025 yield potential could be better than average but less than the 2024 harvest.
This brings us to the other main topic in the outlook, Indian government policy. With acreage and crop prospects smaller than last year, it’s possible the Indian government will decide to keep import tariffs off for peas, lentils and chickpeas. This would help keep food prices low for Indian consumers but wouldn’t make farmers very happy.
The current situation is that import tariffs are set at zero for peas, lentils and chickpeas. The deadline for peas has been extended several times and the latest deadline is February 28, unless it’s extended again. For lentils and chickpeas, the deadlines are March 31 and those can also be extended.
Because the government’s goal for the zero tariffs has been to keep food costs down, prices for the various pulses can be a clue about possible changes in policy. For peas, prices have been dropping ever since the tariffs were zeroed out in late 2023 and have continued to decline steadily as imports from Canada, Russia and elsewhere flowed into India. With Indian pea prices now at the lowest point in years and the harvest soon to arrive, it may encourage the government to impose import tariffs again to protect its farmers.
Desi chickpea prices rose sharply last year in response to a smaller 2024 Indian harvest but have now given back all of those gains. The latest steep declines are showing up as the big Australian crop is now arriving in India and boosting supplies in the country. This could allow the government to reimpose tariffs on desi chickpeas at the end of March. And as yellow peas are a substitute for desi chickpeas, the lower chickpea prices could also support the return of tariffs on peas after February 28.
The situation for lentil tariffs seems a bit clearer. Prices in India are holding steady, in line with the government’s Minimum Support Price and are also helped by the drop in Australia’s recent harvest. The steady prices suggest there’s less chance of tariffs being reimposed on lentils at the end of March.
Crop markets are full of uncertainty and the situation in India is no exception. We are used to the ups and downs in prices that are caused by smaller or larger crops. With the Indian crop getting closer to harvest, that uncertainty is starting to fade. But the unpredictability of government policy remains just as large as ever.
Pulse Market Insight provides market commentary from Chuck Penner of LeftField Commodity Research to help with pulse marketing decisions.