Terry Youzwa, a Saskatchewan farmer and the chair of Pulse Canada, on his farm near Nipawin, Sask. Canada is the world’s top exporter of peas, which are grown across Saskatchewan, Alberta and Manitoba.Liam Richards/The Globe and Mail
India and China, the top two markets for yellow peas, have now each put steep duties on imports, and Canadian farmers are demanding that Ottawa take action to resolve the trade dispute.
On Wednesday evening, New Delhi announced 30-per-cent duties on all imports of yellow peas. Canada is by far India’s largest supplier, selling more than $700-million worth last year to that country, where they act as cheaper alternatives to domestic pulses.
In March, China levied 100-per-cent tariffs against Canadian peas and also imposed levies on Canadian canola meal, oil and pork.
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The two markets account for 80 per cent of all Canadian yellow pea exports, and the double-whammy trade disputes have resulted in low prices and an 18-per-cent drop in exports compared with last year.
Neither New Delhi’s nor Beijing’s actions came as a surprise.
In 2017, India levied 50-per-cent duties on pea imports. New Delhi granted a tariff exemption in 2023 when domestic food prices started to climb, and that had been extended until now.
The new tariff is designed to protect domestic producers, the government said. And on this front, Canada does not have much leverage. New Delhi is not a proponent of free trade when it comes to agriculture, said Rambod Behboodi, a lawyer at Borden Ladner Gervais LLP specializing in international trade, including agricultural exports.
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However, Ottawa does have options when it comes to China. Beijing’s levies on Canadian yellow peas and other agricultural commodities are geopolitical, directly tied to Ottawa’s tariffs on Chinese electric vehicles, steel and aluminum. Beijing has signalled it is ready to negotiate if Ottawa reconsiders its EV barrier.
“This has been going on for eight months now,” said Terry Youzwa, a Saskatchewan farmer and the chair of Pulse Canada, the industry association representing growers of peas, lentils, chickpeas and dry beans.
“Producers and trade have been taking a haircut and experiencing losses due to political decisions by both parties that have an impact on us directly, but it’s out of our control.”
Canada is the second-largest producer and top exporter of peas globally. Peas are grown on some 3.7 million acres across Saskatchewan, Alberta and Manitoba.
Pulse Canada is working on expanding markets in Southeast Asia and is also investing in new ways to use peas, including pet food and alternative forms of protein such as no-meat burgers.Liam Richards/The Globe and Mail
India and China are important markets because of the size of their populations but also because of their national diets, Mr. Youzwa said. High-protein pulses such as peas are essential in India, where 30 to 40 per cent of the population is vegan. In China, yellow pea starch is used to make vermicelli noodles, a household staple in several regions.
Market diversification could soften the blow of those countries’ trade barriers, Mr. Youzwa said. Pulse Canada is working on expanding markets in Southeast Asia and is also investing in new ways to use peas, including pet food and alternative forms of protein such as no-meat burgers.
Canada started moving into China about two decades ago, said Jeff English, the vice-president of communications at Pulse Canada. The market was primed for growth, and Canada managed to capitalize. China’s pea import demand has grown 137 per cent over the past decade, making up for much of the drop in demand from India between 2017 and 2023.
However, India and China cannot be replaced. Comparatively small countries cannot make up for a drop in demand from the two most populous countries on the planet, Mr. Youzwa said.
“You would need 10 countries to replace one of them, and 10 to 20 years of building a relationship. You want to maintain those markets and grow elsewhere – you cannot replace the scale.”
National processing capacity is also limited, said Derek Squair, an adviser at Exceed Grain Marketing. Typically, Canada sends raw, unprocessed peas to China and India. Other markets, such as the United States, are different. The demand in these markets is largely for livestock meal, and for that purpose the peas must be processed first. Additionally, prices are also lower for livestock peas.
Without India and China, exports are down. Year-to-date bulk exports of peas are 18-per-cent below last year’s, according to data from the Canadian Grain Commission. There are also 59,000 tonnes of bulk peas at Vancouver export terminals waiting to be loaded onto ships, according to Marlene Boersch, the founder of Mercantile Consulting.
In October, Chinese Ambassador Wang Di said Beijing was prepared to drop its agricultural tariffs if Ottawa removed its 100-per-cent levies on Chinese EVs.
Prime Minister Mark Carney met with Chinese President Xi Jinping last Friday, and Minister of Agriculture and Agri-Food Heath MacDonald was in China last week. Ottawa is informally reviewing its EV tariffs but has offered little specifics and no deadline.
On Monday, Minister of Foreign Affairs Anita Anand announced that Pakistan had agreed to facilitate in the trade of Canadian canola ahead of continued bilateral discussions between Ottawa and Islamabad.