(Bloomberg) -- Farmers in Australia, the world’s biggest exporter of chickpeas, have halved their plantings after the nation’s top customer hiked tariffs to levels that rendered the trade untenable, according to an industry association.
India imposed a 30 percent import tariff on chickpeas in December before increasing it to 40 percent in February and to 60 percent in March. The country raised it again this week to 70 percent in retaliation to the U.S. imposing higher levies on some products. India’s initial tax was already enough to deter growers from planting, regardless of the subsequent duty increases, Pulse Australia Chief Executive Officer Nick Goddard said.
“That stopped the trade dead in its tracks because at 30 percent tariff we were just not competitive,” he said in a phone interview on Friday. “At the end of the day it could go up to 100 percent and it wouldn’t change anything.”
Compounding the tariffs has been growing concerns about the dry start to Australia’s winter-crop season after the country’s south had its second-driest autumn on record. That’s made it tougher for farmers to plant crops, while some growers have returned to cereals and oilseeds such as canola as those prices rebound, Goddard said.
The area planted to chickpeas will be between 200,000 to 250,000 hectares (494,000 to 618,000 acres), half of last year, he estimated. Production may total about 500,000 tons, down from last year’s 1 million tons, according to Goddard.
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