The role of pulses in the food supply security in the world is receiving increasing attention. And the establishment of the 10 of February as the World Pulse Day by the General Assembly of United Nations confirmed this fact. Herewith, 2016 was declared as the International Year of Pulses. However, the market factors play the main role in development of the market. Therefore, how they affected the market tendencies in 2018/19 MY, and what should we expect next season, APK-Inform asked the President of the Global Pulse Confederation (GPC), Arslan Huseyin.
The Global Pulse Confederation, earlier known as CICILS IPTIC, is a nonprofit organization established with the aim to increase the importance of pulses industry in general. It is the single international confederation. Among its participants, there are more than 20 national associations and more than 600 companies from the private sector with the total profit of $100 billion of the retail trade, and the volumes of production and exports at more than 65 mln tonnes with the deliveries to more than 55 countries. GPC provides the transparency and the sustainability of development of each market sector, and strives to contribute directly to the global food security and improvement of the health and nutrition of world population.
— Mr. Huseyin, what main trends for the market of pulses in 2018/19 MY would You specify? Which of pulses became the obvious favourites of the season, and which have lost their positions?
2018/19 marketing year was not very easy for pulse international traders due to usual importing countries production level and mostly because of the carry over stocks. Price levels came to historical average levels, which also increased the consumption. Yelow peas due to price level became very popular at international trade. At the same time, pigeon peas and desi chickpeas were less favourite in the last year international trade.
— What are the TOP countries-producers, -consumers, -exporters of pulses for now? How did the rating change compared with last season?
In terms of the leading countries-producers, they are India, Canada, Myanmar, Australia, Ukraine, Turkey, Russia and Kazakhstan. As consumers, India, Turkey, Egypt, Sri Lanka, Pakistan, Bangladesh, Sudan, Saudi Arabia are the leading countries. In export side, Canada is the leading exporter beside Myanmar, Australia, Turkey, Ukraine, Russia, Kazakhstan, some African and South American countries. Dubai is a very important re-exporter for Asia and mostly redirects the product to the Arabian Peninsula.
— The market participants expect India to increase its demand on pulses, due to the forecasted production decline because of drought. How do You estimate the market of pulses in India?
Last couple of years, due to the higher production, and last year, due to the carry over stocks, Indian government tried to regulate the Indian market with bans and restrictions. As they are consuming almost 25% of the global production, it had a big impact on the global pulses market. We as GPC several times reminded that this type of unpredicted policies would damage the supply chains of pulses in the world.
— Is it possible that India in short-term perspective will cancel or reduce the import tax on pulses? Or does the country have the high stock potential to secure the domestic consumption?
I believe India will bring new regulation either by reducing duties, or will go into licensed quota system. İn short-term period, they may prefer licensed quota for Indian processors. Indian consumption is 23 mln tonnes. And numbers so high that stock levels can very rapidly go to zero level and may trigger the domestic pulse prices. That is the reason we say predictability of Indian policy not only brings exporting countries to produce accordingly, but also will prevent domestic Indian prices some stability. You cannot find 3 mln tonnes of pulses in short period of time. 3 mln tonnes is only 13% of the Indian production. And it is normal to have 10% deviation in production. Predictable and fair trade policy is very important to protect Indian consumers from high pulse prices.
— How would the price conjuncture form on the global market of pulses in terms of possible decline of the crop in India and the maintenance of the import tax on pulses?
I don’t want to even consider crop failure in India as this will rocket the prices. Of course, it depends on the level of production failure. When it is big, this will make uncontrollable price increase. At the same time, modest levels crop reduction will lead India to reduce import duties.
— If we look at the long-term perspective for development of the global market of pulses, the experts forecast the growth of pulses production in 1.5 times by 2050. In Your opinion, which pulses would be of highest demand?
With announcement of the International Year of Pulses in 2016, and 10 February as the World Pulse Day by the United Nations, pulses started to get its popularity in conventional and nonconventional markets. Now every day you can see dozens of news coming to world media with pulses subject. This will increase hyperbolically news on world media and awareness also will increase accordingly. We like to give constantly message to the people on this planet. To protect the planet and to protect your health you should consume more pulses. Sustainable agriculture is not possible without pulses. If you want to be efficient on your crop field, you should use pulses in your crop rotation.
It is normal to see by 2050 increase consumption by 50%, so 1.5 times increase is not impossible.
Yellow peas, lentils and chickpeas should be the one on high demand depending on prices.
According to the preliminary data by the IGC, in 2018 the volumes of global trade of pulses to decrease by 15% to 14.9 mln tonnes. The reason for such a significant decline can be a sharp reduction of pulses imports by India — from 5.4 mln tonnes in 2017, to nearly 1.4 mln tonnes in 2018. At the same time, the decline of exports can be attributed to Australia — to 1.4 mln tonnes (-57%). Herewith, in general the TOP-3 main exporters of pulses are unchanged — Canada (5.3 mln tonnes), Australia and Myanmar (1.4 mln tonnes).
Speaking of the export structure of pulses, in 2018 peas (5.6 mln tonnes) covered more than 40% of the global trade volumes. Also, there is the high demand on lentils (2.8 mln tonnes) and chickpeas (1.9 mln tonnes).
Interviewed by Ekaterina Mudriyan, APK-Inform Agency