Bilal Doni, Head of Sales and Trading at Doni and Company talks to Sonia Sharma about the Pakistani harvest, developments in the pulse import market and how Ramadan could impact demand.
The planting season for our Desi chickpeas, lentils, and Kabuli chickpeas is set to commence in October. It's noteworthy that the production of lentils and Kabuli chickpeas in Pakistan remains relatively modest. Specifically, we yield an annual output of approximately 10,000 to 20,000 tons of lentils and 20,000 to 40,000 tons of Kabuli chickpeas. Nevertheless, the domestic demand for these crops significantly surpasses our production capacity, necessitating substantial imports to meet consumer needs.
Desi chickpeas serve as the primary winter pulse crop in Pakistan, yet there has been a consistent decrease in the cultivated land area dedicated to this crop in recent years. The principal driver of this decline can be attributed to insufficient returns for farmers, primarily stemming from shifting weather patterns and a lack of timely rainfall.
Under favorable weather conditions, our harvest has the potential to yield between 450,000 to 500,000 tons of Desi chickpeas. However, our average production over the past five years has hovered around 300,000 tons. Anticipating further reduction in acreage, roughly 10-20% lower than the previous year, this year's harvest outcome will hinge largely on the prevailing weather conditions during the growth phase.
The trend for import and consumption of desi chickpeas and black matpe will likely continue and we are import dependent for both of these pulses. Desi chickpeas are mainly imported from Australia with small quantities from Russia and Tanzania, while black matpe is not produced locally and mainly imported from Myanmar with small quantities from Thailand and Afghanistan by road.
For context, black matpe consumption ranges from 80,000 to 100,000 tons, and Desi chickpeas ranges from 500,000 to 600,000!
An intriguing development in the pulse import market has been the noteworthy increase in overland trade, primarily originating from Commonwealth of Independent States (CIS) nations, particularly Kazakhstan and Russia. A substantial quantity of yellow peas, Kabuli chickpeas, desi chickpeas, and red kidney beans now enters Pakistan via road transportation, passing through the Pakistan-Afghan Torkham border.
This route is perceived as a cost-effective and expeditious alternative to sea-based imports from CIS countries and it has gained a substantial share of the pulse import market in Pakistan.
“An intriguing development in the pulse import market has been the increase in overland trade, primarily originating from Commonwealth of Independent States (CIS) nations, particularly Kazakhstan and Russia.”
In 2022, Pakistan faced a challenge concerning its foreign currency reserves, primarily due to a current account deficit. This deficit resulted from a combination of factors, including decreased investor confidence owing to political instability, higher expenses related to importing fuel, and increased costs associated with servicing our national debt.
However, our government took proactive measures to tackle this issue. It reduced the import bill by permitting the import of essential goods and successfully reinvigorated the IMF programme. This, in turn, instilled confidence not only in the IMF, but also in friendly nations like the UAE and Saudi Arabia, leading them to extend loan facilities to Pakistan.
As of now, these challenges have been resolved, and Pakistan no longer faces foreign exchange issues. Dollars are readily accessible for importers of pulses, and commercial banks are actively opening Letters of Credit to facilitate trade.
Pakistan maintains robust ties with leading global producers and traders in the pulses industry. It has earned a solid reputation as a trustworthy and dependable purchaser for pulse-exporting nations. Even during periods of foreign reserve challenges, issues were infrequent and minor.
Over the past two years, Pakistan has imported nearly a dozen or more bulk shipments of pulses, a clear testament to the high level of trust that sellers place in Pakistani buyers.
The surge in demand associated with Ramadan typically commences approximately six weeks prior to the beginning of the holy month. With Ramadan anticipated to start on 22 March 2024, we anticipate an upswing in the demand for pulses beginning in February 2024.
This heightened demand predominantly originates from the flour industry, which primarily relies on desi chickpeas and yellow peas. It is also worth noting that the consumption of other types of pulses remains unaffected by the Ramadan season.
Pulse consumption has experienced a modest decrease when compared to previous years, primarily due to elevated prices in terms of the Pakistani Rupee (PKR), attributed to the devaluation of our currency. In comparison to four years ago, the average cost of pulses has surged threefold in our domestic currency.
Additionally, there has been a shift from higher-priced pulse products to more affordable options in terms of consumption. This substitution includes a preference for green mung over lentils and a choice of smaller-sized Kabuli chickpeas over their larger counterparts.
“Additionally, there has been a shift from higher-priced pulse products to more affordable options in terms of consumption.”
Pakistan is projected to maintain its status as a net importer of pulses in the upcoming year. The trend of increasing imports from CIS countries through land borders, connected to Afghanistan and Iran, is anticipated to persist.
In addition to this, the ongoing reduction in the cultivation of desi chickpeas by farmers, in favor of more lucrative alternatives, is expected to drive an increased necessity for importing these chickpeas from overseas.
Disclaimer: The opinions or views expressed in this publication are those of the authors or quoted persons. They do not purport to reflect the opinions or views of the Global Pulse Confederation or its members.
