There’s unlikely to be an asset class that’s matched the price-action of Mumbai pea futures this week.
After declining throughout 2017 from above $5 a tonne in April, prices went vertical in response to a shift in policy by the Indian government.
This chart posted on Twitter by Mecardo — a company which provides analytical data on the agriculture industry — shows the move:
Boom. And just like that, if you fancy some dhal, made from dried yellow split peas, and a staple of the Indian diet, the cost of the core ingredient is now at least 25% higher.
According to Mecardo, the price rises were driven by the introduction of a 50% import tax on the shipment of peas.
The Times of India reports that the move was in response to increased competition from foreign producers, namely Canada. The government also doubled the import tax on wheat to 20%.
The original tweet from Mecardo is below. You can follow Mecardo on Twitter here.
This is what happens when a government introduces a massive import duty. Indian pea import duty increased to 50%. pic.twitter.com/kwnGdEFtDE
— Mecardo (@mecardoAU) November 10, 2017