Canada: Producers await India’s decision on pea import duty

The yellow pea market hinges on a looming policy decision in India, says an industry official.

If India extends its exemption on pea import duties past the current Oct. 31, 2024, expiry date, it will spark another round of demand from that country, Rav Kapoor, chief executive officer of ETG Commodities Inc., said during a recent Global Pulse Confederation (GPC) webinar.

But he doesn’t think that will result in rising prices due to ample supplies of the commodity.

If India does not extend the duty exemption, prices will likely fall as Canadian exporters scramble to find new markets for a big crop.

Statistics Canada is forecasting 3.01 million tonnes of production, a 15 per cent increase over last year, which he believes is bang on. The breakdown is 15 to 20 per cent green peas and the remainder yellows.

Bulk movement of the crop has been almost non-existent early in the 2024-25 crop year, which is unusual.

Kapoor blames it on labour unrest in the rail sector and policy uncertainty in India and China, the two top markets for the crop.

“Everyone is very cautious,” he said.

“Everyone wants the dust to settle and then make a call.”

Ryan Van Pevenage, a trader with Columbia Grain International, said there was only a small increase in pea acres in the United States due to the massive uptick in lentil plantings.

He estimates 70 per cent of U.S. acres were planted to yellow peas, which raised the eyebrows of moderator Marlene Boersch, managing partner of Mercantile Consulting Venture.

Van Pevenage said growers in that country are tired of rain causing bleaching issues with green peas.

“A lot of growers are really struggling to make green peas work due to the large risk in quality,” he said.

Boersch is forecasting 795,000 tonnes of U.S. pea production, three to five per cent below last year’s level.

Van Pevenage said early-season movement has been good due to Canada’s transportation issues.

Kapoor said green pea quality is a mixed bag on the early samples, as is often the case, with bleaching levels ranging from one to 15 per cent.

He will have a better idea how prevalent the bleaching issue is in about a month. If there is a big problem, prices for good quality green peas will be on the rise.

There is not much carryout of green peas from the previous year, so farmers may hold back on sales until they see some price movement, he said.

Van Pevenage said the U.S. has become a significant buyer of Canadian peas due to demand from the pet food market.

In fact, the U.S. has become a net importer of peas in the past few years.

Russia has emerged as a key competitor to Canada in the Chinese market. Kapoor sees that trend ramping up in 2024-25 due to Russian peas being shut out of the European Union.

The EU was importing about 100,000 tonnes of Russian peas per month that will now head to China.

Canada will likely fill the void in the EU, leading to a realignment of global trade.

Another potential market factor in 2024-25 is Canada’s anti-dumping investigation into Chinese pea protein imports.

“The early findings were that they didn’t find the dumping behaviour as severe as the assessment was in the United States,” said Boersch.

On June 28, 2024, the U.S. announced antidumping and countervailing duties ranging from 127 to 626 per cent on Chinese pea protein imports.

Van Pevenage said U.S. pea protein manufacturers have not yet seen an increase in business resulting from the new duties.

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Tags: import duties, Canada, Production, India, U.S., Market, demand, Russia, yellow pea, China, EU, prices