Amidst disruption in supplies of pigeon pea (tur) from Mozambique due to the rivalry between two commodity firms, its prices will likely remain bullish despite the possibility of higher imports from Myanmar. A stand-off between commodity firms Export Trading Group (ETG) and the Royal Group Limitada has led to disruption in supplies of pigeon pea from Mozambique in recent months.
Mozambique is the largest producer of tur in Africa and accounts for around 40 per cent of the region’s shipments to India, the largest producer and consumer of pulses.
According to a Reuters report from Maputo, a Mozambican court last week ruled that a shipment of pigeon peas belonging to global commodities broker Export Trading Group (ETG) cannot be exported to India. “ETG went to court to prevent Mozambican-based Royal Group Limitada from exporting thousands of tonnes of the peas, valued at $61 million, that it alleged had been illegally seized from ETG warehouses. ETG also appealed to Mozambique’s President Filipe Nyusi for his intervention in December.” the report said.
Ruling applies to shipping firms
The report said the Maritime Court of Nampula Province ordered the “suspension of departure and transit, by sea, of cargo in bulk and containers consisting of pigeon pea, soya, sesame, peanuts, rice and corn, seized from the claimant (ETG)“. The court order said the ruling extended to major shipping companies, including CMA CGM and Maersk.
Early in November, at least 150,000 tonnes of pigeon peas bound for India were held up at ports in Mozambique awaiting export permission from customs and pushing up prices of the protein-rich staple food, the report said.
“ETG has previously said the dispute with Royal Group arose in 2022 when a cargo of soyabeans which Royal Group was exporting to India was held up over suspicions that the crop was genetically modified. Royal Group alleged ETG had tipped off authorities and unsuccessfully sued them in court.” the report said.
Fallout of disruption
Bimal Kothari, Chairman, India Pulses and Grains Association (IPGA) said the developments in Mozambique have disrupted the supplies, adding fuel to the fire. The supply disruption from Mozambique has led to a price increase of around Rs 5-7 per kg in the past couple of weeks, he said. The price rise is despite the fact that arrivals in the domestic market have picked up and imports from Myanmar have begun in small quantities.
“The domestic crop was impacted due to erratic weather and the shortfall in supplies is expected to be around 15 lakh tonnes. The crop is getting harvested in Myanmar and we expect the imports to be higher at around 4 lakh tonnes,” Kothari said.
As per the first advance estimates tur output is expected to be 34.21 lakh tonnes, margainlly higher than previous year’s 33.12 lakh tonnes. The consumption of tur is estimated to be around 45 lakh tonnes.
All factored in
“Considering the shortfall in output and the import scenario, we expect prices of tur to remain bullish. Prices are not going to go down,” Kothari said adding that higher prices could see consumers shift to other pulses like lentils. The supply of lentils is seen higher this year on rise in imports and also the country is set to emerge as the largest producer with output estimated at around 1.6 million tonnes.
To boost the supply of pulses, the Government has already extended the import window at zero duty for lentils, tur and urad till March 2025. Also, the Government has permitted the duty free imports of yellow peas till March 2024, which has helped to keep pulses prices under check.
“The pace of imports from Mozambique has slowed down and there will be a delay but no significant impact seen on the prices as the market has already factored in the developments. Moreover, the imports from Myanmar has started and also the domestic arrivals have picked up. The prices are expected to remain firm despite the market arrivals and imports,” said Rahul Chauhan of IGrain India. The imports from Myanmar are expected to be higher this year at around 3.5 lakh tonnes due to a higher crop, Chauhan said.