Currently, India has entered into long-term contracts with Brazil and Argentina to ensure stable import of pulses.
Pulses occupy a significant place in the diet of Indian citizens, but domestic production in the country is still lacking.
Now it has even fallen: if last season the production of legumes was 26 million tons, now it has fallen to 23 million tons.
Overall, the country’s pulse production has increased by 37% since 2015, largely due to government efforts. For example, measures are being taken to improve the quality of seeds.
However, it is still not possible to completely replace imported volumes with our own production. For example, last year India purchased about 3 million tons of pulses.
At the same time, supplies mainly came from Canada, Australia, Mozambique, Tanzania, Sudan, Malawi and Myanmar. Now the Indian government has decided to revise the list of suppliers, expanding it to include Brazil and Argentina.
When choosing suppliers, several factors were assessed, the main ones being attractive prices, as well as logistics accessibility.
Both are of great importance when concluding long-term contracts.
It is planned that such contracts will help ensure stable, predictable prices over many years, without volatility.
In addition, diversifying the list of exporters helps protect against shocks that may be caused by a bad harvest or political instability in one of the countries.
“Long-term deals with available alternative suppliers will greatly help in supply management as it provides a hedge against price volatility,” the Indian government said.
For example, last year the price of pulses in India suddenly and quite significantly increased because the monsoon damaged crops in nearby supplying countries.
In order to prevent prices from rising in the domestic market, the Indian government then had to cancel import duties on several types of agricultural products at once; the cancellation is valid until March 2025.
Brazil is currently slated to soon ship 20,000 tonnes of black urad to India, while Argentina is preparing to supply pigeon peas.
Both are pulses that are very popular in India.
It is noted that there are plans to expand the production of these crops in Argentina and Brazil. The climate of these countries is favorable for the cultivation of such crops, while their own consumption is practically absent.
