The MV Watatsumi recently discharged the first cargo of Australian lentils at Mundra, India, benefiting from a 50 percent tariff reduction and a quota system. This shipment, totaling 21,000 tonnes, was handled by Viterra, a major bulk handler based in South Australia. The lentils were loaded at Port Lincoln on the Eyre Peninsula and arrived at Mundra in late March.
The reduced tariff and quota system are part of the Australia-India Economic Cooperation and Trade Agreement. This agreement replaced a previous period of tariff-free access for lentils that ended on March 31. Australia has been actively exporting lentils to India, with approximately 275,000 tonnes shipped during the first five months of the current shipping year.
The 21,000-tonne cargo from Viterra, valued at A$21 million, is expected to be the only bulk shipment to India in March. Viterra’s CEO for ANZ, Philip Hughes, expressed gratitude for the agreement between the Australian and Indian governments, which allows Australian growers to access the premium Indian market. South Australian lentils are particularly sought after for their high quality, and Viterra aims to continue supporting local growers by connecting them with Indian end-use customers.
In addition to lentils, the Australian Government’s Department of Agriculture, Fisheries, and Forestry manages tariff-rate quotas for almonds, cotton, oranges and lemons, and pears. The lentil quota is allocated per calendar-year quarter, with 37,500 tonnes available for each quarter. Any unused quota rolls over to the following quarter, and allocations are made on a first-come, first-served basis.
Shippers must adhere to strict timelines and requirements to benefit from the 50 percent tariff reduction. Failure to meet these requirements results in a tariff equivalent to 11 percent of the shipment’s value. Chickpeas, which also lost their tariff-free status on March 31, are subject to the same 11 percent tariff without the benefit of a reduced rate or quota.
Despite the tariffs, the current low value of the Australian dollar makes exports of chickpeas and lentils to India financially viable. Australian chickpea stocks are reportedly low, leading to increased demand from Pakistan. Traders are pricing current-crop Australian chickpeas at around $900 per tonne delivered to Downs packers, with new crop prices at $800 per tonne. Some growers are forward selling their tonnage in anticipation of a promising 2025-26 crop season.
Overall, the trade relationship between Australia and India in lentils and chickpeas is subject to evolving market conditions and government agreements. The recent cargo discharge at Mundra highlights the importance of these agreements in facilitating trade and supporting the agricultural industry. Subscribe to Grain Central’s newsletter to stay informed about the latest news and developments in the grain industry.
