India Imposes 50% Duty on Peas
NEW DELHI - Nov 8/17 - SNS -- Effective November 9, the import duty on green and yellow peas will go from zero to 50%. The duty will remain in place until changed or rescinded by the government.
Traders in the country believe that this will apply to all peas which have not cleared customs.
Pea shipments from Canada have already slowed significantly. Data by destination is not yet available for peas which were loaded to bulk vessels in October.
But by the end of September clearances to India totalled 259,500 metric tons (MT), compared to 55,800 MT for Bangladesh and 319,900 for China.
Available data, shows that another 180,900 MT were loaded for all destinations in October. Any cargoes destined to India, but which have not arrived will be subject to the import duty.
Brokers in the country suggest that if possible, vessels be diverted to other destinations such as China, Pakistan or Bangladesh.
Movement from Canada had already slowed sharply because the exemption from penalty if cargoes were not fumigated with methyl bromide at origin ended on September 30. That pushed demand to countries where the exemption expired on December 31 or which already fumigate peas. There were indications demand was higher than normal as importers hoped product would arrive in the country before the government imposed import duties and/or other restrictions.
The problem facing importers is that any product arriving as of November 9, will immediately have a landed cost 50% higher than product which has already arrived but not yet been sold to domestic buyers.
Until those peas have been cleared, Indian demand for peas from any origin should be soft.
The prospective collapse of Indian demand would be expected to have a negative impact on world trading levels for field peas. The implication is that the future replacement costs may not be as high as envisioned by the Indian government.
A further implication is that land in peas could drop sharply in several countries in 2018, with the result any problems with the 2019 rabi season crop could leave India vulnerable to supply shortages from the last half of 2019 to the first half of 2020.