India is Changing The Preference

India's reliance on lentils from Canada remains steady, despite growing tensions between the two nations. However, traders are starting to shift towards Australia, seeking more stable and diverse sources to reduce dependence on Canada.

Pulses, which are a staple in Indian diets, have become a bit of a volatile commodity in recent years. India relies on imports to meet about 17% of its annual pulse needs. Traditionally, Canada has been a top supplier, especially for lentils (masur) and yellow peas, with India spending close to USD 4 billion on pulse imports during the 2023-24 period.

Why Steady Pulse Supplies Matter

For India, keeping a steady supply of pulses isn’t just about availability. It plays a big role in managing inflation, especially with food prices spiking. In September 2023, India saw retail inflation hit a nine-month high of 5.49%, largely driven by food inflation at 9.24%. This surge in pulse prices has had a major impact, even affecting the Reserve Bank’s plans to cut interest rates.

Part of the problem lies with unpredictable weather. The 2023 El Niño threw India’s monsoon off balance, which drove up the prices of common pulses like pigeon peas (tur), black gram (urad), and chickpeas (chana). With these challenges, India faces the constant struggle of securing affordable pulses from global markets.

The Role of Canada and Rising Diplomatic Tensions

Even though diplomatic ties between India and Canada are strained, trade in lentils has managed to continue. Analysts have pointed out that, so far, neither country has imposed trade restrictions. "There hasn't been any direct impact on trade so far, and we’re still importing lentils from Canada," said Bimal Kothari, vice-chairman of the India Pulses and Grains Association.

However, with tensions rising due to political fallout, traders are being cautious. The strained relations stem from the 2023 assassination of a pro-Khalistani leader, Hardeep Singh Nijjar, in Canada, which led to allegations of India’s involvement. This uncertainty has caused traders to explore alternative suppliers.

More Buying Opportunities from Australia and Russia

Indian traders are now turning to Australia for lentils and Russia for yellow peas. "We’ve been purchasing a lot more yellow peas from Russia and lentils from Australia," said Kothari. "It’s not just about diversifying but also about finding competitive pricing."

In 2023, India imported 687,558 tonnes of lentils from Canada, making up 45.41% of total pulse imports. However, for the first time, Australia has overtaken Canada, contributing 775,994 tonnes or 51.25% of India’s total lentil imports.

Between January and July 2024, Australia’s lentil exports to India surged, reaching 366,433 tonnes, representing 66.3% of India’s lentil imports for that period. Russia has also stepped up, supplying 2.2 million tonnes of yellow peas, helping India reduce its reliance on Canada.

Competitive Pricing and What’s Next for Pulse Trade

This change in sourcing is largely driven by more favorable pricing from Australia and uncertainty about how things with Canada will play out. "Australia’s share of the market has grown not just because of pricing, but also because traders are hedging their bets," said Robin Jalan, managing director of Saraswati Impex Pvt Ltd.

Although Canada remains a crucial trade partner, the ongoing diplomatic issues could affect future trade relations if tensions don’t ease.

Pushing for Higher Domestic Production

Meanwhile, India has been making progress in boosting its domestic pulse production. According to the Agriculture Ministry, a seed distribution campaign increased productivity by 34.8%, from 727 kg per hectare in 2018-19 to 980 kg per hectare in 2021-22. This increase has reduced India’s need for imports, but unpredictable weather still affects crops, leading to price surges and the need to continue importing.

Conclusion: Time to Diversify More?

As India diversifies its pulse imports, traders and farmers alike are looking for ways to keep prices steady. With Australia and Russia stepping up, the pulse trade is becoming less dependent on Canada, but for now, India will need to maintain strong trade ties globally to keep inflation under control.7





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