India has extended duty-free imports of Canadian peas: a benefit for farmers, a challenge for traders.
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India has extended duty-free imports of Canadian peas: a benefit for farmers, a challenge for traders.

India extends duty-free import of Canadian yellow peas until 2026. China has imposed a 100% tariff on peas from Canada due to a trade war. The export of yellow peas to China has decreased, so access to the Indian market becomes important for Canada.

Russia will also start supplying peas to India, creating competition for Canadian farmers. Canada may reduce prices to maintain its market position.

4 June 2025 4 June 2025

Pea producers from Canada breathed a sigh of relief upon learning that India has decided to extend duty-free import of yellow peas until March 31, 2026. The previous exemption was set to expire on May 31, 2025, as reported by Sean Pratt on the Canadian agri-portal Grainews. Vivek Agrawal, the head of JLV Agro company in India, noted that the policy changes brought good news for Canadian farmers and Indian consumers but did not elicit a positive response from Indian traders.

“The market is saturated with various types of legumes,” he pointed out, speculating that legume prices in India will either remain stable or decrease slightly after such an announcement.

This news came just in time for Canadian farmers who recently lost one of their main pea markets, China, which imposed a 100% tariff on this product in response to Canada's actions regarding tariffs on Chinese electric vehicles, steel, and aluminum.

Last year, Canada exported around 500,000 tonnes of yellow peas to China worth $306 million, which was below the usual demand level. The average annual shipment over five years was over 1.5 million tonnes amounting to $740 million. Losing access to the Indian market at this time would be a real blow to Canada.

Analysts from AgPulse Analytica forecast that in 2025-2026, India may import one to two million tonnes of legumes, which is lower than the current agricultural year's volumes of 2.3 million tonnes.

Agrawal believes that importing 1.5 to 2 million tonnes of yellow peas looks optimal. It will be a significant volume but not as high as the previous year.

Russia and Canada will be the suppliers of these peas. Russian farmers plan to produce between 4.5 to 5 million tonnes, which will pose a serious competition to Canadian exporters expecting production at a level of 3.13 million tonnes according to forecasts by Canada's Ministry of Agriculture.

Agrawal thinks that Canadian producers will have to lower prices to compete with the demands of Russian counterparts, expecting prices around $360 per ton for old crop and $345 per ton for fresh crop with delivery in July-August.

“It is possible that at a higher price, China will prefer to buy from Russia, leaving Canada as a supplier to India,” speculated the analyst.

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