Pulse weekly outlook: Eyes on India as North America’s prices firm

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CNS Canada — From where Prairie pulse market analysts sit, India’s politics and current weather situation remain important to watch.

India’s national election will be called in the next three to five months. “There’s so many hundreds of thousands of farmers in India and they have political clout,” said Allan Johnston of Johnston Grains at Welwyn, Sask.

As the rural vote makes up almost half of India’s electorate, in the fall of 2017, Prime Minister Narendra Modi and his Bharatiya Janta Party (BJP) government hiked import duties on pulses as a means to boost domestic prices.

That backfired when two good crops combined with poorer than expected exports drove down commodity prices in India, according to the Economic Times.

The Congress Party then won a number of recent state elections in India with a promise to forgo interest on farm loans. Nationally, Congress is headed by Rahul Gandhi, who has continued to make that same promise to the country’s farmers.

Gandhi is the fifth member of the decades old Nehru-Gandhi political dynasty to lead Congress. The Economic Times reported there is not a clear front-runner currently in national elections, though it’s widely believed Modi and the BJP are still in the lead.

Continuing dry weather, meanwhile, has hampered Indian crops.

“They still have the most critical window of their growing season,” said Jonathon Driedger of FarmLink Marketing Solutions in Winnipeg. “That will be one of the things watched really closely here going forward.”

If India’s weather problems persist, the country could be back on the world market wanting to buy pulses, Johnston said.

While India has topped the world in pulse production, it has also been largest consumer of pulses.

Driedger and Johnston also noted North American pulse prices have firmed up since harvest.

“Generally speaking, I think prices have been holding up relatively firm for most pulses. We had a nice little move higher than some of the post-harvest lows when prices were really depressed,” Driedger said.

“We’re finding that the market, which was completely dead all summer and early fall, there’s some things happening,” Johnston added.

There’s an ample global supply of pulses currently, they noted, which could serve as a ceiling as to how high prices might rise in coming months.

— Glen Hallick writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.

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