THE AUSTRALIAN pulse industry is closely watching a controversy surrounding the prices of pulses emerging in our largest market for legume crops, India.
The allegations relate to alleged collusion by major pulse traders in 2015 where there are claims multiple companies acted in a cartel like manner to manipulate prices in the sector.
2015 saw international pulse values soar, primarily on the back of a poor Indian season for production, however a recent report published in the Indian media said there had been a government investigation into possible collusion.
To date, no charges have been laid as a result of the investigation.
Pulse Australia chairman Ron Storey said he did not think the report had direct implications for Australia.
He said the price manipulation was alleged to have occurred in the urad (black bean) and toor (pigeon pea) markets, neither of which are commonly produced crops in Australia.
However, he said the case showed how serious an issue food security was in India.
“You can see that this is something the Indian population is extremely passionate about.”
“If nothing else, we need to learn just how important this issue is to our major customer in terms of pulses,” he said.
Mr Storey said internationally pulse prices soared in 2015 due to low production.
“Certainly at least some of the price rise was due to fundamental factors, whether there was anything else involved in terms of the Indian domestic market I could not comment.”
While it is not believed any of the scandal relates to Australian pulses there are some familiar names on the list of those alleged to be involved, including one of Australia’s major pulse buyers, Glencore.
A spokesperson for Glencore said the company strenuously denied all the allegations raised in the reports.
“The price rise was only in two pulses – toor and urad – Glencore’s imports of these commodities (into India) are very low.”
She said the major two crops traded by Glencore in India were red lentils (masoor) and yellow peas and these saw no price rise.
She said price rises or fluctuations may have been caused by the retail sector, along with the aforementioned issues with global production.
The spokesperson said Glencore rejects any allegation that it was involved in ‘cartel-like‘ behaviour or contributed to a ‘dal crisis’ in India.
“We have robust operating procedures and all of our trades have a paper trail and are accounted for in line with Indian and international standards,” she said.
The Indian media has carried allegations the high prices were created by collusive activity on both the physical and futures markets.