THE BIG PICTURE
THE BIG PICTURE
To understand the origins of the desi price crash, we have to go back to May of this year, when India removed its 40% duty on desi chickpea imports. This was a starter pistol, fired for the benefit of the world's desi producers – particularly Australia – to let them know India would be in the market for imports. Aussie farmers responded by ramping up seeding, and a season of favorable weather led to mammoth production. To put the increase into perspective, last year's Australian production was between 450-491 KMT, whereas estimates this year suggest we may see this tripled. "Effectively we've gone from a 400 KMT production to a 2 MMT production," says Mostyn Gregg, Vice-President of Olam Agri. "Others would go a bit lower than me, but I think that given the conditions, acreage, and exceptional yields we’ve seen so far – decile 10 yields – 2 MMT is achievable.”
Will Watchorn, Global Head of Pulses at Viterra is a little more conservative, stating that Aussie farmers will "be looking at less than 2 MMT.” The lastest ABARES report, released on December 4, aligns with this, projecting 1.9 MMT, a significant correction from the initial 1.3 MMT it had predicted As expected, India was keen to bring in imports of Aussie desis as soon as the harvest was brought off , but strain on logistics has stemmed the flow. Struggles to pump out crops are perhaps understandable, given its unique size and the circumstances it emerges into. Mostyn Gregg explains: "The variations in crop size, especially on the East Coast of Australia, mean there hasn't been investment into East Coast elevation – the system is set up to execute an average back in September. Boom to bottleneck
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