How the diplomatic row with Canada can cause a dal shortage in India

The diplomatic tensions between India and Canada following the killing of Khalistani leader Hardeep Singh Nijjar are worrying not just for international leaders but also for the common man. The fissure can cause lentils shortage in India, resulting in the higher prices of staple. Here is a closer look. Decline in the lentils sales Canadian lentil sales to India have slowed since Canadian prime minister Justin Trudeau said last week he suspected India of involvement in an assassination on Canadian soil, fearing reprisal from New Delhi that could limit trade , industry sources in both countries say. Trudeau said that Canada was “actively pursuing credible allegations” linking Indian government agents to the murder of a Sikh separatist leader in British Columbia in June. India’s foreign ministry called the allegations “absurd.” Canada is India’s main import source of lentils, a protein-rich staple used to make daal. Reduced Indian purchases would likely cut the prices Canadian farmers receive during harvest. But such a move could also inflate India’s domestic food prices, which would be politically risky ahead of a national election next year. [caption id=“attachment_13174492” align=“alignnone” width=“640”] Reduced Indian purchases would also cut the prices Canadian farmers receive during harvest. AP[/caption] After a drop in output, India banned wheat exports last year, followed by a ban on non-basmati white rice this year to preserve supplies of those staples. “Industry officials are concerned that there could be trade restrictions by the governments owing to current tensions between the countries,” said Nitin Gupta, senior vice president of Olam Agri India, a major importer. There are no such plans by India and Delhi has not instructed importers to refrain from purchases, said a senior Indian government official, declining to be named due to the sensitivity of the situation. **Also Read: Will India-Canada ties continue? What Canada's defence minister said** The Indian government has suspended issuing visas to Canadians and each country has expelled some diplomats. Canada is not currently taking any action that would directly affect trade with India, said an official with the Canadian Global Affairs department, declining to be named. Canadian lentils a critical need for India Indian buyers bought significant supplies of Canadian lentils earlier in the year for delivery after harvest, said Kevin Price, senior export merchant at Winnipeg-based crop trader Parrish & Heimbecker. “Obviously we’re concerned about making sure (the sales) get 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. Due to India’s poor crop, lentil prices are high, but since Trudeau’s comments Indian offers for Canadian supplies have dropped six per cent to around $770 (Rs 64,092) per metric tonne, Price said. A second Canadian exporter said while Indian buyers have become hesitant, overall global demand for lentils remains strong. [caption id=“attachment_13174532” align=“alignnone” width=“640”] India consumes around 2.4 million metric tonnes of lentils annually, but local production falls short at 1.6 million tonnes. Pixabay[/caption] Canada was the biggest supplier of lentils to India during India’s 2022-23 financial year ended on 31 March with shipments of 485,492 metric tonnes worth $370 million (Rs 3,079 crore), accounting for more than half of India’s total lentil imports, according to data from India’s trade ministry. The trend had been continuing, with India’s imports of Canadian lentils from April to July jumping 420 per cent from a year ago to 190,784 tons, the trade ministry data showed. India consumes around 2.4 million metric tons of lentils annually, but local production falls short at 1.6 million tons, said Bimal Kothari, chairman of India Pulses and Grains Association. Indian buyers are now seeking lentils from Australia and slowing purchases from Canada, said a Mumbai-based dealer with a global trading firm, who was not authorised to speak publicly. **Also Read: What's at stake for India and Canada as ties between the two countries nosedive?** “Inflation within the pulses 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,” the dealer said. Indian government is prepared The supply of lentils remains uncertain, although the Indian government has assured that the country’s lentil supply will be uninterrupted as a result of the conflict with Canada. According to government officials, the majority of the red lentils imported from Canada have already arrived at Indian ports. Over the last year, India’s overall local lentil production has increased significantly, lowering dependency on imports. India has also diversified its import of lentils to other countries, reducing its heavy dependence on Canada. “Australia has surpassed Canada in terms of lentil imports this year,” said Rahul Chauhan, of agri commodity research firm, iGrain India. **Also Read: Nijjar killing: Did Canada carry out surveillance on Indian diplomats?** During the April-June period in 2023, India bought about 0.95 lakh tonnes of lentils from Canada, while masoor imports from Australia totalled 1.99 lakh tonnes, according to Chauhan, as reported by Economic Times. Furthermore, the government has maintained zero per cent import duty on lentils, allowing masoor dal supplies from other nations to continue. The price of lentils in India has risen only slightly, from Rs 92 to Rs 93, indicating that there is no immediate need to be concerned about a shortage of red lentils or masoor dal in Indian kitchens. Furthermore, nations such as Australia and Russia are projected to increase their supply of the product to India, filling the void left by Canada. With inputs from Reuters