India drops pulse tariff bombshell

India imposes snap 50pc tariff on field peas


Grain
Tony Russell, of the Grains Industry Market Access Forum, says the Indian Government's decision to impose a 50 per cent tariff on field pea imports came without notice.

Tony Russell, of the Grains Industry Market Access Forum, says the Indian Government's decision to impose a 50 per cent tariff on field pea imports came without notice.

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The pulse industry is scrambling to make sense of a snap Indian decision to impose 50pc tariffs on field pea imports.

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THE GLOBAL pulse trade is nervously assessing the implications of a snap Indian Government decision to impose a 50 per cent tariff on the import of field peas.

The decision will impact Australia’s field pea exporters but is of far greater consequence to Canada, which exports up to two million tonnes of yellow peas, which come under the field pea banner, to India.

Smaller tariffs have also been imposed on wheat and palm oil imports.

India has enforced the tariffs in light of better than expected domestic production in a bid to ensure reasonable prices for its own growers.

Pulse Australia chairman Ron Storey said the sudden adjustment to the import rules was a concern.

“The global trade views the propensity for India to change the rules in terms of imports as a constant challenge,” Mr Storey said.

He said the Australian Government, via the Department of Foreign Affairs and Trade (DFAT) had joined forces with US and Canadian officials to try and negotiate a deferral of the commencement of the tariff to allow cargo on the water not to be impacted.

The decision comes after India previously imposed tariffs on pigeon peas and urad beans earlier in the year.

Wheat is now subject to a 10pc import tariff, which could be problematic for Australia, although the trade had factored in markedly lower demand from the subcontinent this season.

India was a major market for Australian wheat last harvest, but exporters suspect with the better Indian season, wheat imports will be slashed.

Mr Storey said while field peas were not a major Australian export, with most of the peas ending up in domestic stockfeed rations, exporters were concerned the tariffs may spread to other commodities.

“There are no chickpea or lentil tariffs at present, but as with all situations like this, there are rumours flying around that further imposts could be a possibility.”

Tony Russell, of the Grains Industry Market Access Forum (GIMAF) said the tariffs distorted the international market.

Australian field peas will likely end up in stockfeed rations this year with the introduction of high tariffs for imports into India, the largest human consumption market for the product.

Australian field peas will likely end up in stockfeed rations this year with the introduction of high tariffs for imports into India, the largest human consumption market for the product.

“It is a real worry when this type of thing happens without notice.”

“The trade gets very nervous when it starts to have to factor in this kind of risk appearing out of the blue.”

While Mr Russell and Mr Storey both said the Australian grains industry was fighting to stop the tariffs, paradoxically it may be good news in the short term for Australian chickpea producers.

“It will probably increase the price of chickpeas in the short term as Indian buyers look for substitutes to Canadian yellow peas, but this is very much a short term benefit of the decision,” Mr Russell said.

Mr Russell said the Australian ag sector was ensuring tariffs on agricultural imports were considered in any potential free trade agreement between Australia and India.

“We realise we may be relatively small in terms of overall trade between the two countries, but the pulse business to India is growing all the time and is not insignificant.”

“We are working to ensure agricultural considerations are factored into any deal.”

Mr Storey said a long-term deal with India would help smooth out trade hurdles.

“There are strategic plans in place stretching out to 2035 so it is certainly something the Government is working on.”

World edible oil markets have been shaken by the news of the palm oil tariffs, with a 2.9pc drop in palm oil in Malaysia, the major producer of palm oil.

Crude palm oil tariffs were increased 15pc to 30pc, while refined palm oil now has a 40pc import duty, also up 15pc.

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