Canada’s lentil sales to India slow after Trudeau raises murder suspicions

WINNIPEG, Manitoba/MUMBAI, Sept 26 (Reuters) – Sales of Canadian lentils to India have slowed since Canadian Prime Minister Justin Trudeau said last week he suspected India was involved in a murder on Canadian soil, fearing retaliation from New Delhi that could limit trade. say industry sources in both countries.

Trudeau said that Canada was “actively seeking credible allegations” linking Indian government agents to the murder of a Sikh separatist leader in British Columbia in June. India’s Ministry of External Affairs called the allegations “absurd.”

Canada is the main import source of Indian lentils, a protein-rich staple used to make daal curry.

Reducing Indian purchases would likely reduce the prices Canadian farmers receive during harvest. But such a move could also inflate domestic food prices in India, which would be politically risky ahead of next year’s national elections.

After a drop in production, India banned wheat exports last year, followed by a ban on white rice other than basmati this year to preserve supplies of those commodities.

“Industry officials are concerned that there may be trade restrictions by governments due to current tensions between countries,” said Nitin Gupta, senior vice president at Olam Agri India, a major importer.

There are no such plans on India’s part and Delhi has not instructed importers to refrain from buying, said a senior Indian government official, who asked not to be identified due to the sensitivity of the situation.

The Indian government has suspended issuing visas to Canadians and each country has expelled some diplomats.

Canada is not currently taking any measures that could directly affect trade with India, said an official at the Canadian Department of Global Affairs, who asked not to be identified.

Indian buyers bought significant supplies of Canadian lentils early in the year for delivery after harvest, said Kevin Price, senior export trader at Parrish & Heimbecker, a Winnipeg-based crop trader.

“We’re obviously concerned about making sure (the sales) are executed,” Price said, adding that he’s not aware of any cancellations. “Do they want to take on more now? No. They’re taking a wait-and-see attitude.”

Because of India’s poor harvest, lentil prices are high, but since Trudeau’s comments Indian bids for Canadian supplies have fallen 6% to around $770 per metric ton, Price said.

A second Canadian exporter said that while Indian buyers have been hesitant, overall global demand for lentils remains strong.

Canada was the largest supplier of lentils to India during India’s 2022/23 fiscal year ending March 31 with shipments of 485,492 metric tons worth $370 million, accounting for more than half of imports total lentils in India, according to data from the Indian Ministry of Commerce.

The trend had continued, with Indian imports of Canadian lentils from April to July rising 420% from a year earlier to 190,784 tonnes, commerce ministry data showed.

India consumes about 2.4 million metric tons of lentils a year, but local production is less than 1.6 million tons, said Bimal Kothari, president of the Indian Pulses and Grains Association.

Indian buyers are now seeking lentils from Australia and are decreasing purchases from Canada, said a Mumbai-based trader at a global trading firm, who was not authorized to speak publicly.

“Inflation within the pulse group is currently very high, making Canadian lentils a critical need for India. Any measures taken to restrict imports would likely contribute to inflation, and New Delhi would likely avoid such actions.” said the merchant.

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