Exporters are now subject to a 30 per cent levy
By Diego Flammini
India has once again made exporting lentils more expensive for the Canadian ag sector.
As of Sept. 1, shipments of lentils from Canada and several other countries to India will face a 30 per cent tariff. Levies on American lentil shipments remain higher at 50 per cent.
India also applies a 10 per cent tax on top of the tariffs, bringing the totals to about 33 and 55 per cent, respectively.
The increase on Canadian lentils comes after months of lower tariff rates.
In June, India’s Central Board of Indirect Taxes and Customs announced the lowering of import taxes on most lentils from 30 per cent to 10 per cent until Aug. 31. Tariffs on U.S. lentils dropped from 50 per cent to 30 per cent during that time.
India generally fluctuates its import taxes on lentils and other crops to ensure enough supplies for domestic use and to keep food prices affordable. The country has done so periodically since 2017.
But these actions create instability, which isn’t something the ag sector is comfortable with, said Greg Cherewyk, president of Pulse Canada.
“Canadian farmers and exporters need predictability, and that is a primary focus in terms of our relationship with India,” he said in a statement. “While we were hopeful that the reduced tariff rate would be extended, Pulse Canada will continue to engage with (Agriculture Minister) Bibeau and (Small Business, Export Promotion and International Trade Minister) Ng, and our global counterparts, to develop clear, long-term, predictable rules and access for trade in peas, lentils and chickpeas with India.”
Lentil prices have reflected the Indian tariff situation.
When import taxes were lower, prices were better and vice versa, said Abhinesh Gopal, head of commodity research with Farms.com Risk Management.
“Lentil prices have eased after the (higher) tariffs returned because exports have dropped off,” he said. “Over the summer when the tariffs were reduced, big exports happened. Some farmers still hope for the Indian harvest to be reduced again. It’s possible but will depend on (India’s) winter harvest.”
The federal government is committed to working with India to ensure fair trade for Canadian lentil producers.
“It’s disappointing to see that the tariff exemptions were not extended and this generally continues a concerning lack of transparency and predictability," Agriculture and Agri-Food Minister Marie-Claude Bibeau told Farms.com in an emailed statement. "While these tariffs apply to all importers, they have a real impact on Canadian farmers. We`ll continue working closely with stakeholders to promote the interests of our farmers in accessing this and other markets.”