Malawi pigeon peas (Nandolo) exporters are bound to face pressure following an import cap of 200 000 tonnes on Saturday the Indian Government has placed on the commodity’s imports.
The move will likely put into disarray government’s wider diversification plan, which involves the intensification of legumes growing to supplement foreign exchange from tobacco, which is the country’s number one forex earner, but whose earnings have been dropping over the past five years.
According to the Times of India, the Indian Government has placed the order to protect local prices following a record production, a development that will likely put pressure on producing countries such as Malawi, Myanmar, Tanzania and Mozambique which rely on exports to India.
In their fiscal year running from April to March, traders will be allowed to import a maximum of 200 000 tonnes of the commodity. However, local Indian media have reported that the country has already imported 160 000 tonnes of the commodity and 40 000 tonnes are expected to land by
end of August, which leaves out no scope for new import contracts.
In an interview on Monday, AHL Commodities Exchange (AHCX) communications manager Thom Khanje said they are exploring other export markets following import restrictions on the Indian market.
AHCX deals in crops such as legumes that include pigeon peas.
He said: “India remains the largest consumer of pigeon peas in the world; hence, the biggest market for the product. Notwithstanding, there are other countries which also import the commodity and AHCX is negotiating with prospective buyers from these destinations as alternative potential markets for Malawian pigeon peas.
“We advise farmers and traders to take care of their crop as they wait for further information on new trade arrangements for the crop. It is also our belief that special bilateral consideration will be given to Malawi for its pigeon peas as part of official trade relations between the two countries.”
In a separate interview, African Institute of Corporate Citizenship (AICC) chief executive officer Felix Lumbe said the country needs to revisit its internal strategies, particularly fastening the structured market system which is not working well at the moment.
“Their [Indian] demand level is met and it means there is nothing they can do except imposing those quotas. As a country, it means we have fewer options than before.
“Surely, the quotas by India have come too early, especially when production in Malawi has gone up by 400 percent over the past five years, largely propelled by external demand,” he said.
Lombe said there is need to stimulate local demand by promoting agro- processing and stimulation of internal demand for processed products from pigeon peas.
In the current fiscal year, government indicated its desire to ramp up production of pigeon peas to supplement forex earnings from tobacco.
Malawi exports an average of 100 000 tonnes of pigeon peas to India valued at around $60 million (K44 billion) annually.