Chickpeas hit $1000/t on welcome news from India

Liz Wells, May 7, 2024

Grains Australia Pulse Council chair Peter Wilson, Grain Trade Australia CEO Pat O’Shannassy, GrainGrowers CEO Shona Gawel and Federal Agriculture Minister Murray Watt with representatives of the Indian trade on a visit to New Delhi last year.

BIDS for new-crop chickpeas jumped A$60 per tonne over the weekend in response to India’s news that Australian product can now be bought tariff free.

This follows a firming of roughly $140/t since February, when traders started to anticipate a removal of the 66-percent tariff which has been in place since 2018.

With a promising growing season shaping up, and the Indian announcement, new-crop chickpeas delivered to Darling Downs accumulation and container-packing sites are now booked at $975-$1000/t, up from $800/t in February.

“After the announcement, the market jumped straight away,” one trader said.

Bulk shipped already

Ahead of the Indian Government’s mid-election announcement, trade sources report two cargoes of Australian chickpeas totalling 42,000t have already arrived in the north-western Indian port of Mundra, one diverted from Bangladesh and the other from Pakistan.

Another two or three current-crop cargoes from Australia are expected to load in coming months, with the volume customer expected to be mills making besan flour.

These mills are trying to cover their needs with India’s smaller-than-expected rabi crop, low carryover, and tariff-free imports from east Africa, as well as yellow peas.

Along with the chickpea announcement, the Indian Government announcement an extension of the tariff-free window for yellow peas from June 30 to October 31.

“We’ve been hearing that yellow peas would bring the (Indian) chickpea price down, but that hasn’t happened.

“The reality is that yellow peas have got their own consumption now, and when you’re making chickpea flour, you can only substitute 20-30pc of chickpeas with yellow peas before it starts to change the flavour of the product.”

Current-crop stocks in Australia are low after the export of 367,889t in the six months to March 31 out of a 2023-24 crop estimated by ABARES to total 531,000t.

Indications are that the crop now about to planted in Queensland and northern New South Wales should weigh in at 1 million tonnes plus if the season is without disaster.

With further bulk cargoes now hard to pull together, a flurry of container business is expected to supply Indian buyers wanting 20-60 boxes at a time.

Promising season

Further brightening the mood in the Australian chickpea market has been 15-30mm of rain over the weekend in key NSW growing areas.

In a statement, Sydney-based brokerage IKON Commodities said the “near-perfect timing” of the rain has set the season up with expectations of an above-average crop to coincide with the happy news out of India.

“The removal of import tariffs is a game-changer for the Australian chickpea market,” IKON Commodities director of brokering Sam Sloane said.

“We’ve witnessed increased market activity and firming prices for a few months now in anticipation of a tariff removal.

“With the announcement over the weekend and subsequent trade activity, prices for current-crop shipments are up over $250/t, and new-crop (is) up $200/t since a little over three months ago.”

Grain Producers Australia southern director Mark Schilling said India’s suspension of tariffs on desi chickpeas was good news for Australian producers, opening greater access and opportunity to an important market.

“This notice gives growers the confidence in planting a chickpea crop with little fear of market-access issues,” Mr Schilling said.

“Growers can concentrate on what they do best and continue producing sustainable food for export to important markets, where consumers can also benefit from these high-quality grains.”

He said the timing of the announcement was useful to growers starting seeding, allowing them the choice to expand or adjust their programs and take advantage of the agronomic benefits of chickpeas in their rotation.

“Chickpeas, as a legume and protein supplier, have benefits to growers’ bottom line, as the plant can produce natural nitrogen in the soil to support subsequent seasons and reduce reliance on fertiliser inputs.”

For growers who do not have planting seed on hand, supplies are tight after two harvests where weather damage has been an issue in some districts.

Advice to growers is to germination test seed to ensure what will be the biggest chickpea crop for most growers since the record 2Mt seen in 2016-17 is harvested.

All prices in this article are expressed in Australian dollars.

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