India starts to lower tariffs on Australian lentils with high hopes for other pulses

While China has slammed the door shut on Australian barley by imposing hefty tariffs, India is cutting imposts on pulse grains, potentially creating new opportunities for WA farmers. India is also being eyed as a potential market for Australian malting barley, hopefully taking up to 500,000 tonnes a year. Talks between Prime Minister Scott Morrison and Indian counterpart Narendra Modi took place yesterday to discuss bilateral trade and further cement goodwill between the two nations. That virtual summit between the prime ministers happened just days after the Australian grain industry was notified that India was slashing its tariffs on Australian lentils, from 55 per cent to 11 per cent — including 10 per cent social tax — initially as a trial, until August 31. Premium Grain Handlers managing director John Orr, pictured, said it was hoped the tariff reduction would continue falling to zero per cent by harvest — which starts from November — and extend to other pulses including chickpeas and field peas. “At this stage there are no guarantees that will happen, but the signs are going in the right direction,” he said. India — which was until a few years ago Australia’s biggest customer for field peas, lentils and chickpeas — started introducing the new tariffs on these pulses in December 2017. The move was made in the lead-up to India’s last general election, aiming to protect its growers from falling prices. Tariffs on Australian chickpeas progressively increased from zero to 77 per cent and tariffs on lentils and field peas progressively increased from zero to 55 per cent by mid 2018. But with forecasts of a smaller Indian crop this year, India is again looking to Australian pulses to supplement local production. Mr Orr said after India imposed the tariffs, Australia started supplying bigger volumes to Sri Lanka, Pakistan and Bangladesh. These markets would still be supplied but renewed demand from India should help support prices and encourage growers to plant more pulses in the future, he said. According to Grain Industry Association of WA, WA growers planted 67,000ha of pulses in 2020 (excluding lupins), a fraction of the 8.4 million hectares of total grains sown across the WA grainbelt. “While it is too late for growers to sow more pulses this year, plantings are likely to grow in future years if there’s increased demand,” Mr Orr said. “These grains are a valuable part of a rotation because of their nitrogen-fixing properties.” Separately, India could become Australia’s most important market for malting barley. Since 2009, Australian barley has been unable to enter the Indian market because of phytosanitary restrictions, but those issues have been resolved. A few smaller technicalities are still being worked through and the first shipment of Australian malting barley could leave within months. That breakthough on malting barley came after efforts by Perth-based Australian Export Grains Innovation Centre, which has been working with Indian brewers and maltsters to understand their quality requirements and promote the benefits of Australian barley.