Tariff Suspension Opens Doors for Trade Revival

India has suspended tariffs on Australian chickpeas and grains, paving the way for a revival of a trade previously valued at hundreds of millions of dollars. Australian desi chickpea prices have surged following this decision, enhancing the economic outlook for both nations. India is the world's largest consumer of chickpeas. It announced the tariff suspension, effective May 4 through March 31 of the next year, in response to a poor local harvest.

Impact on Australian Agriculture and Export Market

The tariff suspension is timely as Australia, the top global exporter of chickpeas, begins its sowing season. Peter Wilson, chair of Grain Australia's pulse council, noted that this policy change would likely lead to increased chickpea planting in Australia. He emphasized that Australian exporters are already positioning their products for shipment to Indian ports. Prior to the announcement, prices had climbed from approximately $535 per ton in February to over $900 last week, with prices reaching around $1,150 per ton post-announcement.

Historical Trade Data and Future Opportunities

Over the past five years, Australia has exported an average of 600,000 tons of chickpeas annually, valued at about $325 million. According to Wilson, about 90% of these exports were desi chickpeas, which are smaller and usually darker than the white chickpeas variety used to make hummus. Following the 2017 imposition of a 33% tariff, which later increased to 66%, to support local farmers, India's import of Australian chickpeas significantly declined.

Restored Market Opportunities and Competitive Landscape

With the tariffs lifted, around 60% of Australia's chickpea exports could once again head to India, potentially accounting for up to 90% of India's chickpea imports during the suspension period. Wilson also suggested that competition for Australian chickpeas might increase. And India could reclaim a substantial share of the market this year. Meanwhile, Pakistan and Bangladesh remain other significant markets for Australian chickpeas, underscoring the broad international demand for this crop.