The Canadian pea market has been under intense pressure in recent months due to major trade disruptions with its two biggest export destinations: China and India. Together, these countries have accounted for about 75% of Canadian pea exports in 2024/25, making any policy shift a high-stakes affair.
“The first cloud showed up very unexpectedly in March,” says Chuck Penner of LeftField Commodity Research in the Alberta Pulse Growers’ latest Pulse Market Insight newsletter, referring to China’s sudden implementation of 100% import tariffs on peas and other agricultural products. “Up to that point in the 2024/25 marketing year, China was the destination for 30% of both yellow and green peas from Canada.” The immediate effect was a sharp drop in bids across the Prairies.
India represents the second major uncertainty. After shutting out Canadian yellow peas with 50% tariffs in 2017, India finally reduced tariffs to 0% in late 2023. However, “that reprieve always had a deadline attached,” Penner explains. The latest deadline was set for May 31, 2025. Given that India has accounted for 47% of Canadian yellow pea exports so far in 2024/25, the risk of reimposed tariffs has weighed heavily on the market.
But there are signs of improvement. Last week, India announced a longer extension of the zero-tariff window, now set to run until March 31, 2026. “This ‘extended extension’ is good news because it reaches well into the 2025/26 marketing year and allows trading of new-crop peas,” says Penner. Still, he cautions, “it’s not going to trigger a huge flood of Canadian peas moving into India in the short-term,” noting that Indian importers are still sitting on large inventories that are depressing prices.
China’s situation also offers a hint of optimism. Despite tariffs coming into effect in March 2025, “Canada managed to export 170,000 tonnes of peas to China in April,” Penner notes. “We’re not quite sure how or why that happened, but if this means further exports to China are possible in the coming months, it’s certainly a positive sign.”
Looking back just a few weeks ago, the outlook was grim. “The worst-case scenario, with both India and China stopping imports, was bleak with the potential for burdensome supplies and lower prices,” Penner recalls. “Now it seems a few rays of light are shining from behind the clouds.”
Source : Seed AB