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Chuck Penner, Le field Commodity Research IMPACT OF INDIAN IMPORT TARIFF DECISION PRICES On November 8, the Indian government announced that "it is necessary in the public interest" to impose an import tariff of 50% on peas coming into the country. A er the ini al shock wore off, exporters and farmers tried to figure out what to do next. In the past, the Indian government has dropped hints of policy changes but this me, there was li le if any warning. One possible sign was that earlier this year, India had completely shut down imports of other pulses such as urd and moong beans, slamming the door on exporters from Africa and Asia. And the refusal to drop fumiga on requirements on peas and len ls could have been another sign. The Indian government has a long history of interfering in the marketplace, as it tries to balance the compe ng needs of consumers who want low prices and farmers who want high prices. Over the past few years, it has imposed import bans, limited traders' inventories, applied import tariffs, raised minimum support prices, shut down futures trade and imposed phytosanitary barriers. Each of those ac ons ended up causing some unintended consequences that then have to be fixed with yet another interven on, and on it goes. Large supplies of pulses in India are the main driver behind the more recent policy decisions. Two years of very poor pulse crops drove prices sharply higher and triggered government interference to promote increased produc on. In 2016/17, those changes, helped by favourable weather, triggered record Indian pulse crops. This was followed by another large kharif pulse crop in the first half of 2017/18. Naturally, the large Indian crops drove prices down. Pulse imports haven't slowed down either, at least un l recently. Australia had record produc on last year and big pulse crops were also produced in the Black Sea region and eastern Europe, with most of that headed to India. The end result of these heavy supplies is Indian pulse prices at mul - year lows. In order to please the 40% of the popula on that are farmers, the government decided to step in by restric ng imports. It's hard to overes mate the importance of India to the pea trade. In 2016/17, Canada exported 1.93 million tonnes of peas to India out of a total program of 3.95 million tonnes. India accounted for 52% of Canada's yellow pea exports last year and 40% of greens. 3 2