By Rajendra Jadhav
MUMBAI, May 7 (Reuters) - India's decision to allow duty-free imports of chickpeas is unlikely to help bring down local prices as even record imports would be unable to compensate for the big drop in local production, industry officials told Reuters.
Instead, Indian buyers are turning to much cheaper yellow peas, which India has also allowed to be imported duty free.
Prices of chickpeas, also known as chana, hit a record high of 65,103 rupees ($779.75) per ton last week and have risen nearly 33% in a year. Chickpea accounts for nearly half of India's total pulses production, and is a food staple in the country.
Limited availability of chickpeas in the world market could force India to opt for cheaper imports of yellow peas, which are available in abundance, officials said.
"Even if we assume that India buys all available chickpea supplies from Australia, Tanzania, and other countries, it won't be more than 250,000 metric tons," said Bimal Kothari, chairman of the India Pulses and Grains Association (IPGA).
"However, the shortfall in production is much bigger."
India imported around 150,000 tons of chickpeas in 2023/24.
The government estimates chickpea output this year could match last year's production of 12.27 million tons, but industry players estimate an around 25% drop in production, as the area under cultivation is lower and yields also fell due to adverse weather.
Markets have been receiving nearly a third lower supplies than normal from the new season crop, indicating a drop in production, said Nitin Kalantri, a pulses trader based at Latur in western state of Maharashtra.
Imported chickpeas are even more expensive as Australian suppliers raised prices after India allowed duty-free imports, said Kothari.
Australian chickpea prices rose from around A$900 last week to above A$1,100 a ton this week on the hope of demand from India. However, Indian buyers are not signing new import contracts, said a Mumbai-based dealer with a global trade house.
"There is no import parity in chickpeas. Instead, traders are importing yellow peas, which are cheap and used as substitutes for chickpeas," the dealer said.
India last week also allowed duty free import of yellow peas until Oct. 31, 2024.
Yellow peas, imported mainly from Canada, Russia and Turkey, are available at half the cost of chickpeas, and their supplies are abundant in the world market, encouraging Indian buyers to increase yellow peas imports, said Kothari.
($1 = 83.4920 Indian rupees)
(Reporting by Rajendra Jadhav Editing by Alexandra Hudson)
((rajendra.jadhav@thomsonreuters.com; +91-22-68414378 ; Reuters Messaging: rajendra.jadhav.thomsonreuters.com@reuters.net))
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