Indian pulse demand drives potential SA supply deal

Huge demand for pulses such as chickpeas in India, driven by a mainly vegetarian society, and a poor local chickpea crop has prompted Shree Bankey Bihari Group to investigate SA as a long-term market.

Directors of the company – the largest traders and processors of pulses in India – recently visited the Yorke Peninsula and the Two Wells Viterra site to inspect SA growing and processing procedures, and discuss a potential supply deal with Wembley Farms partner John Kennett, Kadina.

Company advisor Jayant Goel said a direct export deal with SA growers would be a win-win situation, with the company assured of quality and supply, while growers and buyers would benefit from reduced shipping costs due to the direct nature of the deal.

“We intend to source good quality Australian produce into India rather than cheap produce from other countries,” he said.

“The biggest advantage for growers in Australia would be they have assured buyers and a fixed selling price.”

Mr Goel said 18 shiploads – about 270,000 tonnes – of pulses were transported from Australia to India in 2016, only a “miniscule proportion” of total demand.

“Every Indian – 1.3 billion people – would have at least two meals of chickpeas or lentils every day, so that’s the kind of demand we’re dealing with,” he said.

Mr Goel believes the import figure could double on the back of new export deals.

Mr Kennett said India was a huge market with boundless opportunities and a deal with Shree Bankey Bihari Group would have multiple rewards for SA growers and Wembley farms.

“Producing grain is our main source of income and we’re trying to establish markets direct to the end user,” he said. “We’ll be looking for a share of the cost saving so growers can receive a higher price than what they’re receiving today.”

“Security of payment is also paramount. It’s something that will revolutionise the industry because farmers are apprehensive about selling to someone they don’t know. 

“But if they’ve got cleared funds in their account before they release the product then I don’t think they’ll have any hesitation in selling, especially if it’s at a premium price.”

Utilising the Viterra system and on-farm storage is the plan for the partnership, with Mr Kennett hopeful they would begin sending container or bulk shipments this year. He said if the deal was successful, Wembley Farms would look to put prices out and provide a competitive, secure market for SA growers.

THE 60-year-old Shree Bankey Bihari Group, managed by Amar Chand Gupta & Sons, boasts an annual turnover of about $2.5 billion.

With certifications from the International Organisation for Standardisation and Food Safety and Standards Authority India, the company runs 20 grain and pulse processing facilities – all bankrolled by self-generated funds – and two roller flour mills, with produce dispersed to wholesalers and retailers across India.

The company also has eight marketing outlets in one of the largest wholesale/retail grain markets in South East Asia – Naya Bazar, New Delhi.

It owns warehousing facilities with the potential to store 60,000 tonnes of produce, a well-established brand and has a good reputation in the marketplace, according to Shree Bankey Bihari Group advisor Jayant Goel.

Mr Goel said the company was in talks with Australian banks to gain their services for a SA supply proposal, and allow growers the comfort of guaranteed payment.

“It’s a win-win situation and with the adequate amount of support from financial institutions, I think it will improve this kind of trade significantly,” he said.

Mr Goel said the company was also interested in establishing a branch and processing facility in SA if initial trade went smoothly.

Establishing a processing facility would eliminate the waste products from pulses, such as husks and dust, before shipping, with a goal of reducing transport costs.

Mr Goel said a facility could also benefit SA by providing local employment opportunities.