Special One Grain trader, Jacky Sung’s recent trip to Pakistan as part of a trade delegation highlighted that Pakistan is an important market for the Australian pulse farmers. This delegation was a joint effort by Austrade, Pakistan Pulses Importers Association (PPIA) and Karachi Wholesale and Grocers Association (KWGA). Jacky visited Karachi (the port of Pakistan) and Lahore (the capital of Punjab, a major pulse growing region), garnering plenty of information about the Pakistan pulses market.
Pakistan has continued to pick up steam as economic reform has progressed and the security situation has improved. Inflation has declined markedly, and the current deficit has narrowed with favourable prices for oil and other imported commodities. Both GDP and GDP per capita continue to show signs of strong growth and both are expected to continue growing in the future.
Pakistan has a stable demand of pulses. Pulses are a major staple food in Pakistan, and on average Pakistanis consume 6-7 kg of pulses annually, of which chickpeas (3-4 kg) and red lentils (0.5-1 kg) are the two most commonly consumed varieties.
In metric tonne terms, total annual pulse consumption is approximately 1.8 million mt, with Desi Chickpeas between 600,000 to 700,000 mt per annum, Kabuli Chickpeas around 200,000 mt, Lentils around 120,000 mt and other pulses includin black Matpe and red beans totalling around 240,000 mt.
While these commodities are grown locally, domestic production remains insufficient to cover the local demand, so importing is a must. Lentils are mainly imported from Canada, while Kabuli Chickpeas are mainly imported from India. Last season Pakistan imported a record amount of pulses from Australia, accounting for over half a million metric tons of pulse imports and Australia’s second largest destination (behind India), with trade valued at A$465 million.
The Chickpea production in Pakistan for the 2017/2018 is still an unknown. Desi Chickpeas in Pakistan is a Rabi Crop. Sowing takes place in October, the maturity period ranges from 90 to 110 days depending on the variety and location. Harvesting takes place in April.
The crop conditions have not been the most favourable. The plant was suffering from dryness as there was no rain for the entire time from 1st December 2017 to Mid-February 2018. Very little height of the plant reported. However, Chickpea has a high degree of drought tolerant and similar in Australia any rain during Feb/Mar will help boost the yield substantially.
The crop size is forecasted by the KWGA and PPIA to be between 350,000 and 450,000 mt. Average yield estimated around 400 kg/ha. Therefore, the net import amount estimated is anywhere between 150,000 to 250,000mt.
The buyers in Pakistan are generally happy with the Australian suppliers in both quality and logistics execution and are confident that trade relationships will continue to flourish.
One area which buyers have brought up numerous times during discussions, is the accuracy of the Australian forecast for chickpea production. This is a major contribution to their lack of confidence in importing. Which also explains the slower import pace from Australia in the first three months of the season (Oct-Dec 2017).
Last year, many importers suffered heavy losses due to the over importing of chickpeas. Early in the last season, with 1.2million mt Australian chickpeas forecasted initially reported, coupled with a strong Indian demand, the Pakistani importers saw supply was getting very tight. As a result, the importers all rushed in to buy chickpeas. The market turned as the crop continued to get bigger and eventually pegged at 2.2million mt.
Pakistani importers mentioned they relied on countries like USA, Canada and Australia to provide accurate data, as they do not have such systems. Better information sharing between Pakistan and Australia would be a key factor on improving trade between the two.
Looking forward to the remainder of the 17/18 season, it is “all eyes on Pakistan”. The Pakistan importers are confident that they will import the balance of the deficit amount from their production of desi chickpeas from Australia.
Although Pakistan import pulses from a mixture of countries such as Russia, Turkey, Canada, India, Myanmar and USA. Australia and India are the main source markets for desi chickpea imports into Pakistan. One key change this year is that Pakistan have imposed import restrictions for pulses from India and Myanmar. This is done by limiting the amount of import permits granted for these countries. Therefore, giving Australia the strongest position for pulse imports into Pakistan in the coming season.