Wednesday's release of India's 3rd Advance Estimates shows the country's foodgrains production estimated 2 million metric tons higher than forecast in February at 279.5 mmt, a record level that is 4.4 mmt or 1.6% higher than estimated for 2016/17.
This report also includes an upward revision in estimated production for both the summer Kharif crop and the winter Rabi crop of pulses. Total production was revised 560,000 metric tons higher to a record 24.51 mmt. Some sources suggest this meets annual demand, while others suggest demand to be much higher.
The Hindu Business Line reports today that India's Agriculture Ministry is estimating the country's imports will be down 1 mmt in 2017/18 to 5.65 mmt. This is linked to the 2017 record level of production supported by favorable monsoon rains, along with other measures that includes import tariffs, import quantity caps on certain crops, while also tied to support payments used to encourage production.
In recent days, India's government has announced a quota system for certain pulses, capping the import volumes allowable for toor, urad and moong, while inviting importers to apply for import licenses with the stipulation that imports will received prior to Aug. 31. Industry is already showing concern that this 5 mmt quota imported within the next three months will have detrimental effects to the market, while exportable supplies in neighboring Myanmar were said to skyrocket over $100/mt overnight following the announcement given the reduced time allotted for India's importers to transact these shipments.
Further concerns are expressed that pressure on prices below current support levels will act as a deterrent to planting pulses in India, with the current government procurement program viewed as "ineffective." One forecast suggests kharif acres could shift to more profitable crops, while any adverse weather in the future could place the country in a difficult situation.
According to reports issued by the Saskatchewan government and Statpub.com, large green lentils delivered to Saskatchewan plants have stabilized in the past week at an average of $25.86/cwt, down 47% from bids reported one year ago and the lowest level reported since September 2014. This price is consistent with the current range of new-crop offerings, reported at $25 to $27/cwt. Red lentils are showing an average bid of $17.03/bu., down 31.6% from the same period last year while also consistent with the indicated range of new-crop bids at $16 to $18/cwt.
Yellow peas are shown bid at an average of $6.93/bushel delivered to Saskatchewan plants, up from March/April lows but still 24.5% lower than this time last year. This is also consistent with the range of new-crop bids shown of $6.70 to $7/bu. Green peas are bid at $8.50/bu., also higher than March/April lows, while are 5.5% higher than reported one year ago. Old-crop is currently trading higher than the $7.80 to $8.25/bu. range shown for new-crop deliveries.
Perhaps totally unrelated to pulses, zeenews.india.com recently reports that the United States has taken India to the World Trade Organization for suggesting it has "substantially underreported" market price supports for wheat and rice. "When calculated according to WTO Agreement on Agriculture methodology, India's market price support for wheat and rice far exceeded its allowable levels of trade distorting support," as stated by the claim. This is the first time that WTO Committee on Agriculture (COA) notification has been made regarding another country's policies.
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