We bring you the inside scoop on this year’s Canada-India lentil trade from one of the industry’s key players.

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Shyam Venkatesan knows that feeding one sixth of the world’s population is a big responsibility, but one that offers plenty of rewards. As a marketing Senior Trader at Legumex Walker, one of Canada’s largest processors and merchandisers of pulses and specialty crops, Venkatesan has seen India’s demand for Canadian lentils skyrocket over the years.

To achieve optimal market effectiveness, Venkatesan monitors pricing fluctuations, planting reports and other data with a hawk’s eye. Want to know what factors move the Canadian lentil market in India, down to the finest details? Ask Shyam. He sat down with IFT recently to share some of his insights about the current expectations for Canadian lentils in India this year.

“There was hardly any incentive to grow lentils in Canada 20 years ago”

IFT: Why has India been such a successful market for Canadian lentils, besides obvious factors like population growth and culinary traditions?

Shyam Venkatesan: India is a price-sensitive market and substitution of pulses often occurs in the diet. This explains the increasing usage of Canadian green lentils, as they have often been cheaper than the traditional pigeon peas. The green lentils are split into dal and consumed. Indian splitters are able to get a higher splitting efficiency from green lentils than from pigeon peas. The dal made from green lentils also cooks faster than the toor dal from pigeon peas. This is an important factor for the family as it leads to savings on expensive cooking gas. Red lentils are popular as they are also substituted for other expensive pulses. The domestic crop of red lentils in recent years has fallen short due to weather events and lack of scientific cultivation. This has led to increasing imports.

IFT: How has Canada’s lentil industry evolved over the past 20 years and what do you think the future will bring?

SV: There was hardly any incentive to grow lentils in Canada 20 years ago. With increasing demand and better returns, the producers have taken to growing more lentils in their crop rotation. The fact that it is an important element in nitrogen fixation is also a factor. Demand has risen due to changing patterns of agricultural production in countries like Turkey where the farmers have found it more profitable to switch to other crops. Awareness about the health benefits of lentils and the trend towards a vegetarian diet are also contributing factors. Lentils have a bright future as the vegetarian population is growing rapidly and the health benefits of pulses are being well advertised.

IFT: What has been the general outlook among lentil growers and traders during the first quarter of 2013?

SV: Interest in lentils perked up in the industry in December 2012 when it became apparent that the red lentil acreage in India had declined and the pigeon pea crop had also been poor. This resulted in steady demand in the first quarter of 2013. At this point in time there are a number of imponderables in play. The weather and the conditions on the ground will largely determine the planting intentions of the growers, which at this time are in a state of flux. The trading community expects the demand to be sustained for lentils right through the year.

IFT:  How is the Indian lentil crop looking now and how will this affect sales of Canadian lentils in 2013?

SV: Earlier expectations were that the red lentils price spike in India was temporarily caused by dwindling stocks and delayed domestic harvest. The decline in price that was expected never came. Probable causes that have been propounded include: (a) a more serious crop shortage than expected and (b) speculative buying by stockists and importers. Traders now are of the opinion that the demand from the Indian subcontinent for red lentils will be sustained right through the year although prices may plateau.

IFT: How has the shortage of tur (pigeon peas) in India, as evidenced by the purchase tender for 21,000 mt of Canadian green lentils at the end of 2012, affected demand?

SV: The demand for green lentils is largely due to the tenders by the State Government of Tamil Nadu. Since the pigeon pea prices are high and green lentils are cheaper, the Government has been steadily tendering for the dal made from green lentils. The dal from green lentils, called yellow lentils, is distributed through the shops in the Public Distribution System (PDS). If the price gap narrows, the demand from the Government could decrease.

IFT: Do you think Indian demand for Canadian lentils will be enough to lift the burden of heavy stockpiles? How are farmers responding to this situation?

SV: As far as red lentils are concerned, yes, the demand from the Indian subcontinent will substantially reduce the stockpile of red lentils in Canada. The green lentil situation depends on how long the Indian Government tenders continue. Farmers have taken advantage of this opportunity to move their burdensome stocks at pretty good values which they probably didn’t expect in the fall of 2012.

IFT: What role would you say marketing plays in the sale of pulses around the world? What does it take to sell lentils and introduce your products into new markets?

SV: Having an excellent network of agents and customers worldwide, serviced by a diverse merchandising team, is an obvious advantage for Legumex Walker. Giving the customer what they want is key to increasing market share. One size doesn’t fit all—it is here that Legumex Walker, through its market intelligence, has been able to develop niche markets. Having determined the quality that a specific market needs we go to great lengths to maintain that quality and therefore customer loyalty.