Final report

The pigeon
pea value
chain in
Mozambique
Examining the 2017
price fall and its
implications

Jorrit Oppewal
Alberto da Cruz

December 2017

When citing this paper, please

use the title and the following
reference number:
F-36409-MOZ-1
Table of Contents
1. Introduction ...............................................................................................................................5
2. Pigeon Pea Characteristics ..........................................................................................................8
3. Pigeon Pea in Mozambique .......................................................................................................10
3.1 Domestic Production and Number of Farmers ......................................................................... 11
3.2 Production Cost .......................................................................................................................... 15
3.3 The Complexity of the Marketing System ................................................................................. 17
4. International Market ................................................................................................................19
4.1 The Indian Market for Pulses and Pigeon Pea........................................................................... 20
4.1.1 Production of Pulses in India ............................................................................................. 21
4.1.2 Indian Import of Pulses ...................................................................................................... 27
4.1.3 Export of Pigeon Pea to India............................................................................................. 29
4.2 World Market Price and Processing Prospects in Mozambique ............................................... 30
4.3 Dependence on the Indian Market ............................................................................................ 35
5. The Possibility of Diversification to Other Pulses .......................................................................37
6. Recommendations....................................................................................................................41
6.1 Short-Term Measures................................................................................................................. 42
6.2 Measures to Improve Information Systems .............................................................................. 44
6.2.1 Producion Statistics and Price Information ....................................................................... 44
6.2.2 Market Intelligence ............................................................................................................ 45
6.2.3 Monitoring of Trade Data .................................................................................................. 46
6.3 Measures to Promote Diversification ........................................................................................ 46
6.3.1 Market Diversification........................................................................................................ 47
6.3.2 Promote Domestic Consumption....................................................................................... 47
6.3.3 Diversification of Pulses Production .................................................................................. 48
Anexo I – Discrepancies in Trade Data ..............................................................................................51

2
Abbreviations
BM Bank of Mozambique

CA Conservation Agriculture

FAO Food and Agriculture Organization

GoM Government of Mozambique

IAI Integrated Agricultural Survey - Inquérito Agrícola Integrado

ICRISAT International Crops Research Institute for the Semi-Arid Tropics

IGC International Growth Centre

IIAM Agriculture Research Institute of Mozambique – Institututo de Investigação Agrária

INE National Statistics Institute – Instituto Nacional de Estatística

LER Land Equivalence Ratio

MASA Ministry of Agriculture and Food Security

MoU Memorandum of Understanding

MEF Ministry of Economy and Finance

MIC Ministry of Industry and Trade

MINEDH Ministry of Education and Human Development

MSP Minimum Support Price

MZN Mozambican Metical

SIMA Sistema de Informação dos Preços Agrícolas

UAE United Arab Emirates

USA United States of America

USD US Dollar

3
Acknowledgements
This study would not have been possible without the collaboration, encouragement and
commitment of the Ministry of Agriculture and Food Security (MASA), non-governmental
organizations and many individuals. In this context, we would like to express our deepest
gratitude and appreciation to all those who, directly or indirectly, contributed to making
this work a reality. First of all, to MASA, particularly the whole team of the Directorate of
Planning and International Cooperation (DPCI), especially to Director Ilidio Massinga,
Delfim Vilissa, Eulália Macome, Sofia Manussa and Anina Manganhele. At the origin of this
document is an invitation made by DPCI to the International Growth Center (IGC) to carry
out a study on the pigeon pea value chain. The team was instrumental in designing the
terms of reference, preparing the fieldwork, arranging interviews with key stakeholders,
and finally in discussing the initial results. Our thanks also go to Dr. Cláudio Frischtak,
Director of IGC Mozambique, not only for the institutional support given to the project, but
also for his unrestricted availability to provide critical and creative feedback. To the Let's
Work Program team, more particularly to Fion De Vletter, National Coordinator, and Marco
Machado, consultant, for agreeing to work together and for actively accompanying the
process and providing feedback. Finally, we would like to extend our deepest gratitude to
all SDAEs in the districts visited during the field work, and all local extension workers,
farmers and traders who kindly set aside time to speak with us.

4
 1. Introduction
Mozambique has a total area of 799,380 km2, half of which, around 36 million hectares,
represents arable land. The country has abundant natural resources and its agro-climatic
conditions are favourable to the production of a large range of agricultural products, both
for domestic consumption and for export, which is facilitated by the country’s strategic
location, with its long Indian Ocean coastline.

Agriculture is the main economic activity of about 70% of the population and the sector is
dominated by small subsistence farmers. The increased export of agricultural products
could, in addition to its impact on the income of rural families, provide a solid basis for the
diversification of the economy, acting as a major source of foreign exchange and as a
catalyst for inclusive and sustainable economic growth.

The last decade witnessed a remarkable growth in pigeon pea production, rapidly turning
it into one of the country’s main cash crops and agricultural exports. On the back of
growing Indian demand, several African countries, notably Mozambique and Tanzania,
quickly emerged as significant pigeon pea exporters. During this period, various NGOs and
international development agencies partnered with the private sector to promote pigeon
pea production among Mozambican farmers, convinced that the market would remain
strong. As a result of these efforts, production expanded rapidly, reaching almost 200,000
tons in 2016. Most of the production takes place in the provinces of Zambézia and
Nampula, the most densely populated parts of the country. From the 2016 crop,
Mozambique exported more than 170,000 tons of pigeon peas, corresponding to USD 125
million, which makes it the third largest agricultural export, after tobacco and sugar.

Pigeon pea is processed into dhal, the main source of protein for the majority of Indians.
For various years, Indian production could not keep up with growing domestic demand,
leading to a deficit of more than 500,000 tons per year. This made India the world’s largest
producer, consumer and importer of pigeon peas by far, accounting for about 90% of global
imports; there is no other significant market.

5
The Indian Prime Minister visited Mozambique in July 2016 and signed a Memorandum of
Understanding, through which he formalised India's commitment to import 125,000 tons
of pulses in 2017-18, gradually increasing to 200,000 tons by 2020-21. Subsequently, the
Government of Mozambique (GoM) intensified the promotion of pigeon pea production as a
means of meeting the targets. These efforts, together with the high pigeon pea price of
2016, helped to further boost the area cultivated and the number of pigeon pea farmers,
reaching more than one million, which led to an estimated production of 250,000 tons in
2017, the largest ever recorded in Mozambique.

However, in addition to encouraging production in Mozambique, India also stimulated

domestic pigeon pea production, which, combined with good monsoon rains and high farm-
gate prices in 2016, led to an all-time production record of almost 5 million tons in 2017,
enough to satisfy domestic demand and still be left with 1 million tons. As a result, the
pigeon pea price in India collapsed, provoking farmer protests. In response, the Indian
government took measures to protect its farmers, introducing a 200,000 ton pigeon pea
import quota for the financial year 2017-18.

Following these developments in India, the farmgate price in Mozambique fell by 90%,
from an average of MZN 45/kg in 2016 to MZN 5/kg in 2017. Simultaneously, the price of
other important crops dropped as well. The price of maize, for instance, declined from
more than MZN 20/kg in 2016 to around MZN 5/kg. This means that many farmers were
left without any financial revenues, and subsequently without the resources to invest in the
next agricultural season, which could lead to a reduction in overall cultivated area. In
addition, the reduced purchasing power of the farmers created significant multiplier effects
in the local economy. The depth of the crisis varies by district, with the worst impact felt in
those districts where few farmers had other cash crops, besides pigeon pea, which is the
case in most of Middle and Upper Zambézia. In this region, virtually all traders and shop-
owners interviewed in November 2017 reported that their business volume had declined
by more than 50% compared with the same period in the previous year.

India´s dominance of the global pigeon pea market, in particular its 90% share of global
imports, must be carefully considered when reflecting on the future of pigeon peas in rural

6
Mozambique, because it means that Mozambican farmers depend almost exclusively on a
single market. In all likelihood, India will continue its efforts to increase domestic
production and reduce its dependence on imported pulses, particularly of pigeon peas. In
this context, a scenario in which many Mozambican farmers continue to rely on pigeon pea
as their principal cash crop should be avoided. Diversification into other crops, including
other pulses, is imperative.

Pigeon pea will certainly not disappear from rural Mozambique, however, because it has
several highly favourable characteristics from a farmer´s perspective. It is a drought-
resilient crop, does not require much in terms of inputs and has a high nitrogen-fixing
capacity, making it ideal for intercropping with maize or for crop rotation.

This study will analyse the Mozambican pigeon pea value chain, investigating its recent
growth, as well as the international market of pigeon peas and other pulses. The research
team visited the main producing regions of Mozambique, particularly the provinces of
Zambézia, Nampula and Tete, as well as neighbouring Malawi. During these visits the team
interacted with a wide range of relevant stakeholders from the public sector, the private
sector (both farmers and traders), NGOs and academics.

This report, the main output of the research, is organised into six chapters. Following this
introduction, Chapter 2 will discuss the crop´s major characteristics and analyse its
economic, agronomic and nutritional advantages, showing that pigeon pea cultivation has a
positive effect on soil fertility and that it is ideal for human consumption. Chapter 3
analyses the functioning and evolution of the pigeon pea production chain in Mozambique,
with particular attention being paid to its cultivation and to the strategic role of the
commercialisation network, which is complex and composed of thousands of stakeholders.
Chapters 4 and 5 are dedicated to the analysis of the international market, with specific
reference to the Indian market. While the focus is on pigeon peas, the market potential for
other pulses is also examined. Finally, Chapter 6 details concrete suggestions for short-,
medium- and long-term policy measures, with the general aim of placing the subsector on a
more sustainable path and preventing the type of negative shock experienced by
Mozambican farmers in 2017. Table 12 (p.53-54), in the same chapter, provides a detailed

7
overview of all policy recommendations, based on the analyses of this report, including
suggested timelines and responsible entities.

2. Pigeon Pea Characteristics

Pigeon pea [Cajanus cajan (L.) Millspaugh] was domesticated in India thousands of years
ago and its production has multiple advantages, from an agronomic, socioeconomic and
nutritional perspective. Over the last decades, pigeon pea cultivation has been widely
promoted in Southern and Eastern Africa, often in the context of efforts to introduce
"conservation agriculture (CA)" (Barbito et al. 2015) 1. The extent of CA adoption by African
farmers has been the subject of debate. In a thorough review of the available literature,
Andersson and d’Souza (2014) indicate that one particular dimension of CA – intercropping
grains with legumes, especially pigeon peas - has been widely adopted in Kenya (Shiferaw
et al. 2008), Tanzania (Mponda et al. 2013), Malawi (Simtowe et al. 2010), Zimbabwe
(Waddington et al. 2007) and Mozambique (Rusinamhodzi et al. 2012, Devji 2011, Walker
et al. 2015).

In terms of agronomy, the pigeon pea plant has a positive effect on soil fertility, with the
potential of fixing up to 235 kg of atmospheric nitrogen per hectare (Odeny 2007). Its roots
also support the release of phosphorus to the soil, making it available for the growth of
other plants. Although many other legumes also have the ability to fix nitrogen, few are as
effective as the pigeon pea plant in this respect. Furthermore, unlike other legumes, pigeon
pea does not require inoculation to optimize its nitrogen fixing potential (Odeny 2007).

Its strong nitrogen fixing capacity makes pigeon pea ideal for intercropping with maize,
one of Africa’s most important food crops. In West Africa, Sogbedji et al. (2006) find that
maize productivity increases by 32% when intercropped with pigeon pea. Likewise, in
Tanzania, Myaka et al. (2006) argue that the productivity of maize that is intercropped with
pigeon pea is equal to that of monoculture maize that benefited from fertiliser application.

1AC integrates three main concepts: (i) minimum soil disturbance (direct seeding), (ii) mulching, and (iii) intercropping grains
with legumes.

8
Moreover, many consecutive years of maize monoculture without fertiliser application,
which is common in Mozambique, results in soil degradation, while intercropping with
pigeon pea maintains soil fertility (Myaka et al. 2006).

For the specific case of Mozambique, Rusinamhodzi et al. (2012) evaluate the Land
Equivalent Ratio (LER), an indicator used to determine the efficiency of intercropping. An
LER above 1 means that intercropping is more efficient than production of the different
crops in a monoculture system. 2 The authors evaluate the LER on farmer fields in Central
Mozambique, using several different ways of intercropping maize with pigeon pea, and
consistently find values above 1, in some cases reaching close to 2. 3

Several studies on agriculture in Mozambique indicate that one of the main constraints to
increased production is the availability of labour (Leonardo et al. 2007, Lukanu et al. 2007).
Thus, in socio-economic terms, the particular suitability of pigeon pea for intercropping is a
major advantage because it is a cash crop that does not compete with the main food crop
(maize) in terms of the allocation of land and labour resources. Another advantage of
pigeon pea is that it is a low-demanding crop, as it does not depend on fertiliser application.
Pigeon pea is also known to be relatively drought-tolerant, even compared with other
legumes, such as cowpea (Odeny 2007). According to Waddington et al. (2007), the yield
variability of pigeon pea is lower than that of maize or other legumes. Similary, ICRISAT
(website) stresses that the resilience of the pigeon pea plant allows for its cultivation in a
wide variety of environments and cultivation systems, including in areas with less than 650
mm of annual precipitation.

Finally, in nutritional terms, traditional pigeon pea varieties have a high protein content of
18-26%, and agronomists have developed improved varieties with even higher protein
levels (Odeny 2007). Pigeon pea is also rich in minerals such as calcium, phosphate,
magnesium and sulphur, as well as vitamins, containing five times more Vitamin A and
three times more Vitamin C than ordinary peas (Odeny 2007). The pigeon pea grain is

2 For example, for intercropping of maize with pigeon pea, an LER of 1.2 would indicate that 1 hectare of pigeon pea and maize
under intercropping produces the equivalent of 1.2 ha of pigeon pea and maize in separate areas.
3
The most common form of intercropping in Mozambique is to plant maize and legumes in separate rows. For this technique,
the authors measured LERs ranging from 1.1 to 1.4. However, in neighbouring Malawi it is common to intercrop within rows.
For this technique, the authors measured LERs between 1.7 and 2. It would be important for the MASA Extension Services to
evaluate these results and, in case they are confirmed, to promote this intercropping technique among farmers.

9
processed and transformed into dhal, a major staple food in India, and the green pods are
also consumed fresh as vegetables. In addition to human consumption, pigeon pea foliage is
also used to feed cattle 4, and its dry stems can be used as fuel (Odeny 2007). Finally, pigeon
pea can also be used as an alternative protein source in chicken feed. Igene et al. (2012)
find that the substitution of up to 50% of the soybean cake in chicken feed with pigeon pea
has no negative effect on the chicken’s growth, despite having an adverse impact on
haematological indicators, such as the level of haemoglobin and leukocytes. Amaefule et al.
(2011) suggest a diet that integrates 40% of pigeon pea, supplemented with amino acids.

3. Pigeon Pea in Mozambique

Mozambique is one of the world’s largest producers and exporters of pigeon pea.
Traditionally, it has been grown in small quantities, by smallholder farmers, mostly for
home consumption. However, the last decade saw the introduction of a new dynamic.
Increasingly, hundreds of thousands of farmers started to engage in the production of
pigeon pea as their first or second-most important cash crop. This change was mainly
caused by rising demand from India and by the interventions of NGOs and traders to
promote the crop, through seed distribution and agricultural extension. For instance,
World Vision was active in Zambézia and SNV in Tete.

Collecting reliable data on pigeon pea production and sales is not straightforward, as the
crop has not received specific attention in the statistics of the Government of Mozambique
or FAO, which means there are no official annual production data. Given the increased
importance of the crop in recent years, some districts have taken the iniative to start
collecting and monitoring pigeon pea specific data. This is a very important step to
facilitate the development of future initiatives to guide the sub-sector, but the initiative will
need to be adopted at the central level and transformed into a more structured and
comprehensive process.

4 A study by Von Schaaffhausen (1966) shows that, in Brazil, bulls that were fed by grazing on mixed pastures that included
pigeon pea gained 35 kg during 90 days, while those in control pastures gained 6 kg less.

10
 3.1 Domestic Production and Number of Farmers

In the absence of reliable annual production statistics in official government documents,

Walker et al. (2015) traced the evolution of pigeon pea production in Mozambique based
on data from the various agricultural surveys, in particular the Trabalho de Inquérito
Agrícola (TIA) and the Inquérito Agrícola Integrado (IAI), estimating that production more
than tripled between 2002 and 2012. As Table 1 shows, the total number of producing
households increased from approximately 700,000 in 2002 to 1,080,000 in 2012, when
close to 250,000 hectares were cultivated, producing almost 115,000 tons of pigeon peas.

Table 1. Growth of the number of pigeon pea producers and cultivated area.
Number of Average Total Yield Estimated
Year Producers Area Area (ha) (kg/ha) Production
(ha) (ton)
2002 695,286 0.10 68,814 462 31,792
2005 723,228 0.22 157,804 269 42,449
2006 727,142 0.23 170,252 324 55,162
2007 738,142 0.27 198,868 313 62,245
2008 748,593 0.25 190,368 336 63,963
2012 1,079,636 0.23 248,929 456 113,511
2015 760,665 0.24 182,817 379 69,287
Source: Authors, based on Walker et al. (2015), and De Vletter (forthcoming).

The authors show that until 2012, the expansion of pigeon pea production was driven
primarily by Zambézia province, where production increased more than sevenfoldbetween
2002 and 2012. In particular, the districts of Milange, Mocuba and Morrumbala accounted
for more than 40 % of total domestic production in 2012. With the exception of Cabo
Delgado, production also more than doubled in all other provinces in Northern and Central
Mozambique.

Perhaps surprisingly, data from the IAI 2015 suggest that the number of pigeon pea
farmers fell back to 760,000 in 2014-15. This seems to contradict the narrative of a
constant increase of production, driven by increased numbers of pigeon pea farmers.

11
Despite the drop, however, the survey results indicate that pigeon pea was still the most
important cash crop in Zambézia and the second most important one in Nampula, the
country's two most populous provinces (Table 2).

Table 2. Main Cash Crops by Province, 2015

Most Important 2nd Most
Province Income Crop Important Income
Crop
Niassa Tobacco Cotton
Cabo Delgado Cotton Sesame
Nampula Cotton Pigeon pea
Zambézia Pigeon pea Cotton
Tete Tobacco Common Bean
Manica Maize Sesame
Sofala Sesame Cotton
Source: Let´s Work (forthcoming).

Since most of the production in recent years was destined for export to India, Indian import
data can help estimate production trends in Mozambique, given the absence of official and
reliable domestic data. India reports detailed import statistics by product, month and
country of origin, which allows us to construct Figure 1. Although import data for the
calendar year 2015 appear to be high, upon close inspection it can be observed that
substantial volumes were imported in the first half of 2015, which still relates to
production from the 2014 harvest. The imports from September 2015 to August 2016,
which would correspond to production from the 2015 season, show a significant decrease
compared to previous years.

Figure 1. Monthly Import of Mozambican Pigeon Pea by India, 2014-17.

12
 Source: Autores, based on ITC Trade Map.

Based on the Indian import data, Table 3 provides an overview of the agricultural seasons
of 2014, 2015 and 2016 in Mozambique. It is interesting to note that the reduction in
Indian imports of Mozambican pigeon peas from the 2015 season coincides with the
reduction in the number of pigeon pea farmers and production volume as observed in the
agricultural survey data (Table 1), which supports our confidence in the reliability of the
Indian import data. Using the trade data to understand the sector's subsequent dynamics in
Mozambique, we observe extraordinary growth from 2015 to 2016, when exports almost
tripled to more than 170,000 tons. This is largely explained by the fact that the farm-gate
price increased significantly from around MZN 14/kg in 2014 to around MZN 37/kg in
2015. 5

There is no evidence to suggest that there was a jump in productivity, so the sharp increase
in production and export originated mainly from the expansion of the cultivated area. Due
to the lack of data, it is difficult to say whether the determining factor was the increase in
the number of farmers, or in the average area per farmer. All key informants that were
consulted agree that, during this period, pigeon pea production spread to new parts
throughout Central and Northern Mozambique, leading us to believe that the increase in
the number of farmers certainly played an important role. Even when assuming that the

5 It should be noted that farm-gate prices vary according to the region and the period in which the transaction takes place. An
additional factor that can help explain the rapid growth from 2015 to 2016 is a seed distribution project that took place in 30
districts in 2015.

13
two factors contributed equally, we reach an estimate of 1.2 million farmers engaged in
pigeon pea production in 2016.

Table 3. Indian imports of Mozambican pigeon pea per agricultural season6 7

Agricultural Season 2014 2015 2016

Volume (´000 tons) 93.6 59.5 174.7
Value (USD Million) 68.7 71.4 124.0
Source: ITC Trade Map

Considering that the farm-gate price rose even further in 2016, reaching MZN 44/kg 8, it is
to be expected that the number of farmers also increased further in the 2017 season, which
leads us to estimate that the number of pigeon pea farmers in 2017 was above 1.2 million.
Considering that the average household consists of five members, this means that over 6
million Mozambicans, or 20% of the population, were expecting to gain revenue from
pigeon pea sales in 2017. In all likelihood, they will not get these revenues, or much less
than expected, due to the uncertainties regarding access to the Indian market and the
severe drop in the farmgate price. It should be noted that the degree of dependence on
income from pigeon pea varies significantly between districts and provinces. For example,
in the districts of Middle and Upper Zambezia, many farmers had planted only maize,
cassava and pigeon peas in 2017. In most districts of Nampula province, on the other hand,
most farmers also grew other cash crops, besides pigeon pea.

In summary, the strong growth in pigeon pea production over the last decade resulted from
a combination of factors: (i) Indian market demand for Pigeon pea (dhal), driven by
population growth and improved incomes; (ii) the role of NGOs (eg World Vision, SNV,
TecnoServe, etc.) and private sector operators in promoting the crop; and finally (iii) the
highly attractive pigeon pea price in recent years, reaching MZN 40-50/kg in 2016.

6
The price per ton increased significantly from 2014 to 2015, due to the drought in India. Prices started to fall again from the
last quarter of 2016, on the back of good monsoon rains and estimates of an abundant harvest
7
For each season, the export volume and value indicated in the table refer to exports that took place between September of
that year and August of the next year.
8
The depreciation of the national currency also helped to raise the price in MZN.

14
 3.2 Production Cost
In examining the cost of pigeon pea production, we should start with the initial input - the
seed. For 1 (one) hectare of pigeon pea, a farmer needs about 10 kg of seeds. The cost of
improved seed is, on average, MZN 120/kg. However, this cost is irrelevant to the extent
that the vast majority of farmers do not buy improved seeds, and prefer to save a part of
the previous harvest to use as seeds in the following season. 9

For slightly larger pigeon pea farmers, most of the production cost is concentrated on hired
labour for field preparation and weeding. According to Leonardo et al. (2015), we cannot
treat "smallholder farmers" as if they were a homogeneous group. It is important to
distinguish between labour-contracting producers, those who both hire and sell labour,
those who share labour, and those who only sell labour. Usually, in addition to the amount
agreed in cash, the contracted labourer also receives in-kind payments (often lunches and
alcoholic beverages). Throughout Central and Northern Mozambique, this form of
contracting labour is known as ganho-ganho 10.

For those hiring in labour, the "price" of the ganho-ganho is estimated at MZN 50/day +
lunch/drinks, corresponding to approximately MZN 85/day/person. Assuming that one
needs to to hire 15 people for 3 days to prepare a field of 1 hectare, this operation will cost
approximately MZN 4,000 per hectare. Table 4 shows the estimated cost of these and other
operations throughout the season, reaching a total of MZN 11,650 per hectare. It should be
noted that weeding represents the largest share of the cost (44%), even without
considering a third weeding operation, which is recommended. Leonardo et al. (2015)
conclude that access to labour for weeding operations seems to be the main constraint to
increasing agricultural productivity in Mozambique, since productivity is significantly
lower when weeding is not done at the appropriate times.

9
The pigeon pea plant is not very demanding in terms of inputs, since it is a resilient crop, relatively drought-tolerant, and does
not require the application of manure or fertilizers. In fact, the pigeon pea plant enriches the soil. Thus, the main factor for
increased productivity is the availability of certified seed, which has been a challenge in Mozambique. Farmers complain about
the recurrent lack of seeds at agricultural input stores. As a result, only 10% of the farmers use certified pigeon pea seed
(Walker et al., 2015). There has been a great deal of effort, on the part of various stakeholders, to promote the use of improved
seeds, but the coverage remains very limited. According to Walker et al. (2015), pigeon pea has received less attention from the
formal seed system than other pulses and related crops, such as sesame or sunflower.
10
Ganho-ganho means “win-win” in English.

15
 Table 4. Labour Cost for Agricultural Operations, 2016 11

Operation Number Number Approximate Cost

of people of days per hectare (in
MZN)
Field Preparation 15 3 4000
Seeding 15 1 1300
1st Weeding Operation 10 3 2600
2nd Weeding Operation 10 3 2600
Harvesting 10 1 900
Threshing 3 1 250
TOTAL 11,650 Source:
Authors

Considering the cost of production in Table 4 and the average prices of pigeon pea, Table 5
shows that pigeon pea cultivation was highly profitable in 2016. It should be noted that,
using an intercropping regime, the cost per hectare includes the cost of maize production
which implies that, in addition to the MZN 10,850 profit from pigeon pea in that year, the
farmer also obtains the maize harvest, which can be consumed or sold. However, the
drastic fall of the pigeon pea price in 2017, caused by the record harvest in India, will have
a devastating effect on revenue, with the farmers incurring large losses. The extremely low
price will have a strong impact in the Central and Northern regions, increasing rural
poverty and potentially leading to a collapse of trading networks and a crisis in the rural
economy of those districts that are most dependent on pigeon pea. Further, the emerging
farmers who normally contract ganho ganho labour may not be able to do so in the next
season, due to a lack of resources.

Table 5. Estimates of Income from Pigeon Pea Cultivation in 2016 and 2017

2016 2017
Cost per Hectare 11,650 11,650
Productivity (kg/ha) 12 500 500
Pigeon pea price 45 5
Income (MZN) 22,500 2,500
Profit (MZN/ha) 10,850 - 9,150

11These costs are only relevant for the case of “emerging farmers”, who hire labour.
12It is assumed that “emerging farmers” who contract ganho ganho labour attain a yield that is above the national average of
385 kg/ha. In interviews conducted during the field visit, it was found that this type of farmer has a yield of approximately 500
kg/ha.

16
 Source: Author
3.3 The Complexity of the Marketing System
In the post-harvest period, farmers face severe difficulties in drying and storing production,
which can cause significant losses. Therefore, farmers are forced to quickly sell their
produce or to delay harvesting beyond the recommended period. The trading and
marketing network is complex, involving exporters, intermediaries contracted by
exporters, independent intermediaries, micro-intermediaries (called nakarawa or
ringuistas, depending on the province), and warehouse operators. This system is highly
efficient and reaches the most remote production areas.

As shown in Figure 2, there are several channels through which the pigeon peas find their
way from the farmer to the port of export. On the one hand, export companies buy raw
material directly from the farmer. However, the same companies also use intermediaries,
often providing them with lines of credit to purchase produce from the farmers. 13 These
intermediaries are usually shopowners in rural towns and villages, and often happen to be
foreigners, particularly Bengalis. In the post-harvest period, many of these shopowners get
involved in agricultural marketing, setting up buying posts in remote villages where they
purchase the pigeon pea directly from the farmers. Receiving value chain finance from the
exporters, the intermediaries are obliged to deliver the product under the terms and
conditions stipulated in the agreement, regardless of subsequent price dynamics in the
market.

Finally, independent warehouse operators based in the towns either buy directly from
farmers who come to their warehouse with bags of produce, or they work in partnersip
with micro-buyers, known as "Nakarawa" in Nampula and "Ringuistas" in Zambézia, who
go to the villages and farms by bicycle to buy directly from the farmer. Generally,
warehouse operators earn approximately MZN 1/kg.

13
ETG is the main buyer, processor and exporter of pigeon pea in Mozambique. Its pigeon pea purchases are estimated to
account for about 70% of the domestic market. In addition to its involvement in the marketing and export of pigeon pea, the
company also processes pigeon pea (dhal) under its 'Naturz' brand. In recent years the company has invested in new processing
facilities, one in Nacala and another in Beira, each with a capacity of 80 tons/day, equivalent to approximately 24,000 tons per
year.

17
 Figure 2. Pigeon Pea Marketing System

Source: Authors

Exporters determine the price paid at the port on the basis of the international market
price. Starting from there, the price paid along the marketing chain varies depending on the
distance from the port and the number and type of intermediaries involved. Transparency
on the prices paid at various points along the chain is crucial to ensure the optimal
functioning of the entire marketing system, because it can prevent certain intermediaries
from exploiting the lack of price information on the part of other value chain actors, to
artificially boost their margins. Therefore, pigeon pea price information should be included
in the Ministry’s Agricultural Market Information System (SIMA).

Interviews conducted in the field reveal that the exporters are the only actors along the
value chain who possess market intelligence, in the sense of monitoring the evolution of
Indian market conditions. The other intermediaries and warehouse operators are generally
aware of the fact that the produce is ultimately exported to India, but they do not have
information on international market trends. Most farmers have no idea of the final
destination of their pigeon peas, and their only guide to determining how much to invest in
a particular agricultural season is the selling price of the previous season. In this context,
increased access to market intelligence and market information in a timely manner could
play a key role in improved decision-making on production and sales, which could help to

18
avoid the type of catastrophe that occurred in 2017, in which the farmer generally ends up
taking the largest hit.

4. International Market
India dominates global pigeon pea production. Between 2012 and 2014 global production
was just over 4.5 million tons per year, with India accounting for nearly two-thirds of this,
with close to 3 million tons (Table 6). However, India’s dominance has reduced somewhat
over the past two decades, having accounted for 86% of global production in the period
1992-94. Since then, Myanmar and a number of East African countries, including
Mozambique, have significantly expanded their production. 14 Unfortunately, Mozambique
is the only country whose pigeon pea production is not included on FAOSTAT, a situation
that needs to be rectified as soon as possible. Often, international organizations, companies
and consultants resort to FAOSTAT for carrying out quick analyses of the international
market. Due to the absence of data for Mozambique, the country does not feature in these
analyses, which has a negative effect on the recognition of Mozambique as an important
market player.

On the demand side, annual Indian consumption was at least 3.5 million tons during 2012-
14, corresponding to 77% of global production. The remaining 23% is mostly consumed in
other producing countries, such as Myanmar, Malawi, Kenya and Haiti. In other words,
apart from Indian imports, international pigeon pea trading is extremely limited.

Thus, in order to understand the dynamics of the Mozambican market, in particular the
reasons behind the dramatic price fall in 2017, it is necessary to take a closer look at the
Indian market. This analysis is also essential for informing public policy regarding the
future of pigeon peas in Mozambique.

14
In Myanmar, Tanzania and Mozambique, more than half of the production over the period 2012-14 was destined for export,
mainly to India. In other countries, most of the production is consumed domestically.

19
 Table 6. World Pigeon Pea Production, 1992-94 and 2012-14, tons
Average annual % of World % of World
Country Production, Production, Production,
2012-14 (ton) 2012-14 1992-94
India 2,987,567 65.5 % 86.1 %
Myanmar 567,633 12.4 % 4.1 %
Malawi 286,786 6.3 % 2.1 %
Tanzania 233,815 5.1 % 2.3 %
Kenya 202,594 4.4 % 2.6 %
Mozambique 120,000 2.6 % N/A
Haiti 87,013 1.9 % 0.1 %
Dominican Republic 26,489 0.6 % 1.4 %
Uganda 13,360 0.3 % 0.9 %
Ohers 37,719 0.8 % 1.9 %
Total 4,562,976 100 % 100 %
Source: FAOSTAT, and Walker et al. (2015) for Mozambique

4.1 The Indian Market for Pulses and Pigeon Pea

Pigeon pea serves as a raw material for the production of dhal, a staple food for most of the
Indian population. However, it should be noted that pigeon pea (known as tur in India) is
only one among several pulses that can be used for the production of dhal. Other important
pulses are: chickpeas (chana), mung bean/green gram (moong), and lentils (Table 7).
Although these are all different crops, they are close substitutes, which makes it important
to start our analysis by looking at the market for pulses as a group.

Table 7. Types of Pulses Used for the Production of Dhal

Name in Name in English Scientific Type of Dhal
Poruguese Name produced
Feijão Bóer Pigeon Pea Cajanus Cajan Tur / Arhar
Feijão Holoco Mung Bean / Green Vigna Radiata Moong
Gram
Grão-de-Bico Chickpea Cicer Arietinum Chana
Lentilha Lentil Lens Culinaris Masur
Lentilha Preta Black Gram Vigna Mungo Urad
Source: Authors

20
 4.1.1 Production of Pulses in India
According to data from the Indian Ministry of Agriculture, the per capita availability of
pulses decreased dramatically between 1960 and 2005, but has partially recovered since
then (Figure 3).
Figure 3. Per Capita Availability of Pulses in India.

Source: Government of India (2017), p.282

Figure 4 shows the evolution of total pulses availability in India over the period 2000-2017.
The sum of domestic production and imports increased from 15 million tons in 2005 to an
average of 22 million tons between 2013 and 2016. This increase was due both to
increased production, going from 13 million tons in 2005 to approximately 18 million tons
per year between 2011 and 2014, as well as to increased imports. Imports reached
unprecedented levels in 2015 and 2016, of 5.4 and 6.2 million tons respectively, mainly due
to the drought that affected large parts of India in 2014 and 2015. It was in this context that
the Indian prime minister visited Mozambique and other African countries to promote local
production and export of pulses to India. However, against all forecasts, Indian production
in 2017 was extraordinarily high, and more than enough to fully satisfy domestic demand.

Table 8 shows the production trend of the various types of pulses. Chickpea is the most
produced pulse in India, accounting for between 40 and 50% of total production. The
production of all of these crops saw significant growth from 2016 to 2017, thus
contributing to the record production of pulses in 2017. In fact, except for chickpea, which
had its highest ever production in 2014, all other pulses broke their all-time production

21
 record in 2017. In the case of pigeon pea, production grew from 2.56 million tons in 2016
to 4.78 million tons in 2017, an increase of 87%, which is much higher than for the other
pulses.

Figure 4. Area, Production and Import of Pulses in India

Source: Government of India (2017), Ministry of Agriculture & Farmer Welfare

Table 8. Production of different pulses in India, Million Tons, 2006-17.

Year Chickpea Pigeon Pea Mung Bean Black Gram Other

Million % Million % Million % Million % Milhion %
Tons Tons Tons Tons Tons
2006 5.60 42 % 2.74 20 % 0.95 7% 1.25 9% 2.84 21 %
2007 6.33 45 % 2.31 16 % 1.12 8% 1.44 10 % 3.00 21 %
2008 5.75 39 % 3.08 21 % 1.52 10 % 1.46 10 % 2.95 20 %
2009 7.06 48 % 2.27 16 % 1.03 7% 1.17 8% 3.04 21 %
2010 7.48 51 % 2.46 17 % 0.69 5% 1.24 8% 2.79 19 %
2011 8.22 45 % 2.86 16 % 1.80 10 % 1.76 10 % 3.60 20 %
2012 7.70 45 % 2.65 16 % 1.63 10 % 1.77 10 % 3.34 20 %
2013 8.83 48 % 3.02 16 % 1.19 6% 1.90 10 % 3.40 19 %
2014 9.53 50 % 3.17 16 % 1.61 8% 1.70 9% 3.24 17 %
2015 7.33 43 % 2.81 16 % 1.51 9% 1.96 11 % 3.54 21 %
2016 7.06 43 % 2.56 16 % 1.59 10 % 1.95 12 % 3.19 20 %
2017 9.33 41 % 4.78 21 % 2.16 9% 2.80 12 % 3.88 17 %
Source: Government of India (2017), Ministry of Agriculture & Farmer Welfare

22
Looking at a longer period starting in 1960, Figure 5 confirms that both the cultivated area
and pigeon pea production reached historically unprecedented levels in 2017. The key
question is whether this a structural trend. Has India's self-sufficiency become permanent,
or were circumstantial factors at play that temporarily boosted production?

Figure 5. Pigeon Pea Production and Area in India, 1960 – 2017.

Source: Government of India (2017)

Figure 6 shows that, following a phase of solid expansion of pigeon pea production
between 2009 (2.27 million tons) and 2014 (3.17 million tons), accompanied by substantial
import levels (approximately 500,000 tons per year), a sharp decline took place in 2015
and 2016. This resulted in a record import level of 700,000 tons in 2016, the year in which
India signed the Memorandum of Understanding with Mozambique aimed at stimulating
pigeon pea production and export to India.

The figure clearly illustrates the extent of the 2017 production record, which is 40% higher
than the average annual consumption during the previous five years. By the same token,
assuming that, in the coming years, production and consumption will be roughly equal to
2016 levels, and that 1.5 million tons from the 2017 harvest would be stored, India would
not need to import any pigeon pea in the next two years. It was in this context that the

23
Indian Government decided to protect its farmers by imposing import barriers 15, despite
having stimulated African production in recent years with the aim of exporting to the
Indian market and strengthening the country's food security.

Figure 6. Indian Production and Import of Pigeon Pea, 2004-17.

Source: Government of India (2017), Ministry of Agriculture & Farmer Welfare & ITC

15
Notification No. 19 of 5 August 2017, issued by the Foreign Trade Directorate at the Ministry of Trade and Industry of the
Government of India and signed by the Director General for Foreign Trade, establishes a 200,000 ton pigeon pea import quota
per fiscal year. The notification states that this import restriction does not apply to import commitments made by the
Government of India under any bilateral / regional agreements and MOUs, implying that Mozambique continues to have access
to the Indian market up to the volumes stipulated in the Memorandum of Understanding.

Trade Notification No. 13 of 11 August 2017, issued by the Directorate of Foreign Trade at the Ministry of Trade and Industry
of the Government of India and signed by the Deputy Director of External Trade, informs that the import quota of 200,000 tons
of pigeon pea for the fiscal year 2017/18 has already been exhausted, and that there is no longer room for the import of this
product.

It should be noted that, as early as March 2017, the Government of India introduced an import tariff on pigeon pea of 10%. This
measure was introduced through Customs Notification No. 10/2017 of 28 March 2017 issued by the Tax Revenue Department
of the Ministry of Finance of the Government of India. However, this measure did not have a significant impact since all major
suppliers of pigeon pea, including Myanmar, Mozambique, Tanzania, Malawi and Sudan, are signatories to the Duty Free Tariff
Preference Scheme for LDCs, signed in 2008. In the original agreement of 2008, pigeon pea only had a 10% preference margin
(p.37, Nº23), which would mean that, with an MFN tariff of 10%, pigeon pea from LDCs would face a 9% tariff. However, in the
2014 update, there was an expansion of the included products, and pigeon pea from LDCs became fully exempt from customs
duties, no longer appearing on either the exclusion list or the margin of preference list. It is worth noting that Kenya is not part
of the LDC category, and therefore does not enjoy these benefits, so that pigeon pea imports from Kenya would be charged the
10% tariff.

24
Drastic Change of Market Conditions

The Indian bumper harvest, the introduction of an import quota and the consequent fall in
prices has completely changed the international market scenario in the space of a single
year, with adverse implications for the African countries producing pigeon pea. In their
analysis of the Indian market, Walker et al. (2015) came to the conclusion that India would
not be able to raise pigeon pea production to the point of fully responding to the growing
domestic demand. Citing estimates by Dahl (2014), the gap between pigeon pea
consumption and production was predicted to increase from 500,000 tons in 2012 to
1,450,000 tons in 2017, and to more than 3 million tons in 2025. The authors note that the
area of pigeon pea cultivation increased significantly between 2010 and 2013, but
nonetheless conclude that "it is unlikely that rapid area expansion is a sustainable force for
expanding pigeon pea production in India, even with substantially higher support prices for
pulses" (p.25). Overall, they estimate that "rising and sustainable import demand from India
for pulses is, for all intents and purposes, a certainty unless India experiences a sharp
downturn in economic growth and/or a steep depreciation of the Rupee” (p.21).

However, in stark contrast to these optimistic predictions about the Indian market, the
reality is that demand for pigeon pea imports disappeared almost completely in 2017.
Moreover, looking at India's official estimates of next year's production of about 4 million
tons, there are no indications that market conditions for Mozambican pigeon peas will be
much better in 2018. To form expectations of market developments in the coming years, it
is crucial to try to understand what was behind the record production of 2017, and to
assess whether it was an exceptional event, or whether it is part of a more structural
process.

A determining factor was the sharp increase of the pigeon pea price in the Indian market in
2015 and 2016, as a result of reduced production in these drought years. As shown in
Figure 12, the price increased from approximately INR 50/kg in early 2015 to over INR
100/kg at the end of the year, remained high during the first half of 2016, above INR 80/kg,
and started to fall with the first forecasts of the impending 2017 bumper harvest.

25
This price increase led to significant growth of the cultivated area in the 2016-17 season,
reaching 5.13 million hectares, which is 34% higher than the 2014-16 average. The bumper
harvest was a result of the powerful combination of this increase in cultivated area and the
good rainfall in 2016, which boosted yields. Average yield reached 932 kg/ha, a record
level, and 25% higher than the average yield between 2014 and 2016, when rains were
poor.

Another key factor is the Indian government’s agricultural policy, particularly in relation to
the Minimum Support Price (MSP). India has a tradition of guaranteeing minimum prices
for agricultural products, although some states have faced difficulties in effectively
implementing the MSP for pulses. In recent years, the pigeon pea MSP has increased
substantially, from INR 43.5/kg for the 2014-15 season to INR 50.5/kg in 2016-17.

An important report (Subramanian 2016) on pulses was published in September 2016 by

Dr Arvind Subramanian, Chief Economic Adviser to the Government of India. This report
advises the Indian Government to increase the pigeon pea MSP to INR 60/kg. In the same
document, Subramanian also analysed imports, arguing that it would be dangerous for
India to remain dependent on pulse imports because there is a strong correlation between
production in India and the other pulse-producing countries, since they are all susceptible
to El Nino effects. Consequently, in a year of low production in India, the availability of
pulses on the international market would probably follow the same pattern. For this and
other reasons, Subramanian suggests that food security in terms of pulses should be
achieved by increasing productivity and domestic supply (p.10). He also advises that in the
long term a moderate import tariff of 5 - 10% would be a good option to signal to farmers
the Government's intention of and interest in stimulating local production (p.30).

Thus, one cannot simply dismiss the record production of 2017 as an exceptional one-off
event, which is unlikely to happen again for many years. The possibility of Indian
agricultural policy following up on Subramanian’s recommendations should be
contemplated, which could lead to structurally higher levels of production. In this scenario,
26
African production would appear to serve as "costless" insurance so as to ensure sufficient
availability in years of extremely low production in India. It is important to note that the
price of dhal to the urban consumer is a variable of extreme political importance in India,
and the government will always aim to keep it stable and affordable.

4.1.2 Indian Import of Pulses

Despite the change that occurred in 2017, it is important to take a closer look at the
growing Indian import of pulses until 2016. Figure 7 shows that pulses imports tripled
between 2006 and 2016. Yellow split pea (pisum sativum) accounts consistently for half of
pulses imports and is generally imported from countries with temperate climates, mainly
Canada, Russia, USA and France. It should be noted that the price of yellow split peas is
lower than the price of other pulses, but also that it is not so much a substitute for
chickpeas, pigeon pea, mung bean / green gram, lentils (masur) and black gram (urad
bean), because these are all used for the production of dhal, while the yellow split pea is
normally consumed fresh.

Figure 7. Indian Import of Pulses, by crop, 2001-16

Source: Government of India, Ministry of Agriculture & Farmer Welfare & ITC, Trade Map

27
Figure 8 shows India’s import of pulses that are generally grown in sub-tropical climates,
such as Mozambique, in more detail. The annual import of pigeon pea doubled between
2010 and 2016, from 350,000 tons to 700,000 tons. However, the import of lentils tripled
over the same period, while chickpea imports increased five times. The import levels of
mung bean and black lentils (urad) have been more stable, at approximately 600,000 tons
per year.

It is worth noting that lentils can be produced in different types of climate, and Canada, the
USA and Australia are the largest exporters to India. In turn, the largest exporters of
chickpeas include Australia, Russia, Tanzania and Ethiopia. Finally, the main suppliers of
Indian imports of mung and urad beans are Myanmar, Australia, Tanzania, Kenya and
Uzbekistan. The figure clearly shows that, since 2010, growth of Indian lentil and chickpea
imports has been faster than the growth of pigeon pea imports.

Figure 8. Import of (Sub-) Tropical Pulses by India, 2010-16.

28
 Source: Government of India, Ministry of Agriculture & Farmer Welfare & ITC, Trade Map

4.1.3 Export of Pigeon Pea to India

Pigeon pea exports to India have traditionally been dominated by Myanmar, but its share
has declined over the last decade (Figure 9). During this period, East African pigeon pea
exports increased dramatically, from USD 20 million in 2006 to USD 455 million in 2016. It
should be noted that, in the last two years, the African countries, taken together, overtook
Myanmar as the main source of Indian pigeon pea imports.

Figure 9. Export of Pigeon Pea to India: Myanmar and Africa

Source: Authors, based on ITC Trade Map

Figure 10 shows the dynamics of African pigeon pea exports during 2006-16. Tanzania and
Mozambique stand out as the main drivers of the increase in African exports, accounting
for two thirds of the continent's exports to India.

Malawi's exports increased significantly between 2006 and 2008, but stagnated in the
following period, although this is not necessarily related with production levels. In both
Malawi and Kenya, local consumption of pigeon pea has a much stronger tradition than in
other countries. Simtowe et al. (2010) report, for example, that more than half of Malawi's
production is destined for local consumption. A notable case is the very rapid growth of

29
Sudan's exports since 2014. Until then, Sudan had hardly featured at all among exporters to
India, but by 2016 its exports reached 53,000 tons, thus surpassing Kenya’s export of
approximately 25,000 tons.
Figure 10. African Pigeon Pea Exports to India

Source: Authors, based on ITC Trade Map

4.2 World Market Price and Processing Prospects in Mozambique

In the literature we found three propositions in relation to world market prices that
deserve to be discussed further:

1. The processing premium of pigeon pea into dhal is only USD 120/ton, or 20%.
Considering that the conversion rate of the whole pigeon pea to the processed dhal is
0.7, it is argued that it does not make sense for Mozambique to process raw pigeon pea
into tur dhal (Walker et al. 2015).

30
 • Analysis. It is true that with a conversion rate of 0.7, the dhal premium (in USD /
ton) should be at least 43% to offset the weight loss (30/70). In the international
trade statistics (HS) system, there are no separate categories for pigeon pea and
tur dhal, with both entering under the line HS 071360. However, looking at
prices on the Indian market reveals that the premium for tur dhal is always at
least 50%. In October 2017, the price of pigeon pea was approximately INR
37/kg, while the price of tur dhal was approximately INR 61/kg, 16 a premium of
65%. India does not have a differentiated tariff on the import of dhal, so the
premium on the processed product should, in principle, also be transmitted to
the international market.

In this regard, we do not agree with Walker et al. (2015) that, on this basis,
processing into dhal would not be advantageous for Mozambique. On the
contrary, processing would result in higher value-added in the country and job
creation on a competitive basis. In addition, it helps to diversify the market, as
India is practically the only importer of raw pigeon pea, while there are other
markets, albeit small, for tur dhal, such as the USA, Canada, the European Union
and the Middle East.

2. The international market is characterised by price seasonality, with the price reaching
its highest level beween September and December, before the pigeon pea harvest in
India (which takes place in December and January). Such seasonality would imply that
African countries have a short window after their own harvest in August/September to
take advantage of the seasonal premium, which reaches USD 150-200 per tonne,
according to Walker et al. (2015). Based on this assertion, the authors reinforce their
argument that processing in Mozambique is infeasible, as there is not enough of a time
window before prices start falling. Therefore, the sector should encourage the export of
raw pigeon peas immediately following the harvest.

16Level A Commodities, Weekly Report (Tur), 25th October 2017. This difference implies a premium of INR 24 / kg,
equivalent to approximately USD 370 / ton.

31
• Analysis. We find no evidence of price seasonality. Figure 11 shows that there is
a seasonality in terms import volumes, with peaks in the period from October
and December, right after the African harvest. However, between 2014 and 2017
we do not observe seasonality in the price. Walker et al. (2015) state that they
observed data from February 2014 to December 2014 to assess the seasonality
in import prices, which is not a sufficienttime window for such an analysis.
Figure 11 shows that the price in November 2014 was certainly higher than in
February 2014, but it is also clear that this increase formed part of a general
upward trend in the market price, and is not necessarily related to seasonality
dynamics.

Figure 11. Indian Imports Volume and Price per Month, 2014-17.

Source: Authors, based on data from Zauba and ITC Trade Map

Furthermore, if import prices were characterised by seasonality, one would

expect this to be reflected in pigeon pea prices on the domestic market as well.
Figure 12 shows the evolution of the wholesale price of pigeon pea in Indore (a
32
city in one of the largest production zones) between January 2012 and August
2017, confirming that there is no significant price seasonality. The red dots refer
to the months of October and November. Although there is a slight price
reduction in the month of January for the years 2013, 2014 and 2015, these are
not significant movements. It is also clear that the multi-year price trend
dominates any possible seasonal trends. This observation had already been
made by Lo Monaco (2006), who says that there used to be some price
seasonality, but that the effect had faded.

Figure 12. Pigeon Pea Price in Indore (INR / kg)

Source: Authors, based on data from Agriwatch

In fact, considering that India has two agricultural seasons per year, the Kharif
with its harvest in January, and the Rabi in May, one would not expect a strong
seasonality linked to the pigeon pea Kharif harvest. While the kharif is the main
agricultural season, taking advantage of the monsoon rains of August /
September, most pulses, principally chickpeas, are produced in the rabi season
(Figure 13). While some pulses are produced in both seasons, pigeon pea is only
cultivated in the kharif season. To the extent that the major pulses are
substitutes to some extent, their price is less volatile due to the existence of two
harvests.

33
 Figure 13. Production of Pulses in India, by year

Source: Authors, based on data from the Government of India (2017)

3. African pigeon pea exports suffer a slight discount, due to quality issues, when
compared to Myanmar’s, ranging from 5% for Kenya and Tanzania, to 10% for
Mozambique and 15% for Malawi.

• Analysis: In order to test this assertion, we must control for two factors: (i)
export of pigeon pea that has been processed into dhal, which would increase
the price per kilogram; and (ii) export in different months, which may affect the
price. The difficulty is that the trade data reported in COMTRADE do not
distinguish between raw and processed pigeon pea. Zauba data 17, however,
make this distinction and are available for the period from January 2014 to
November 2016. Looking only at the export of raw pigeon pea, and controlling

17 See www.zauba.com

34
 for imports taking place in different months, we find the results reported in
Table 9.

Table 9. Price of Pigeon pea exported to India by country of origin

Country % of Average Price of Indian

Imports of Raw Pigeon Pea,
Controlled for Month of Import
Malawi 95.2
Mozambique 95.2
Myanmar 103.2
Kenya 95.7
Sudan 101.9
Tanzania 96.8
Uganda 94.1
Other 97.7
Source: Authors, based on data from Zauba

Thus, we agree with Walker et al. (2015) that there is a slight discount on
African exports, of similar magnitude for the various countries, with the notable
exception of Sudan. Interestingly, Sudan has been getting better prices than
other African countries, which could be linked to ICRISAT efforts to promote
short-duration, bold-seeded brown varieties in the Gezira Irrigation scheme
(Walker et al., 2015, p.27), one of the largest in the world.

4.3 Dependence on the Indian Market

Table 10 compares, for the largest pigeon pea exporters, the degree of dependence on the
Indian market during the period 2012-16. Mozambique and Tanzania are most dependent
on India, accounting for 98.1% and 95.9% of their exports, compared with 86.7% and
84.9% for Malawi and Myanmar, respectively. In the case of Myanmar, we observe some
exports to China, Malaysia and the United Arab Emirates (UAE).

35
 For a long time, Malawi and Kenya were the only African countries with a significant
processing industry. Until the recent construction of factories in Beira and Nacala, Malawi
had the largest pigeon pea processing industry outside India (Jones et al., 2002). It appears
that a history of tur dhal production has helped Malawi and Kenya to find markets other
than India, especially in countries with a substantial Indian community such as the UAE,
Malaysia, Singapore, United Kingdom and Canada (Shiferaw et al., 2008). 18 Lo Monaco
(2006) reports that, for the case of Malawi, the tur dhal export market has been more
stable than the market for unprocessed pigeon pea. India also imports some quantities of
processed pigeon pea, according to data from Zauba. In fact, Table 10 shows Mozambique
as the main exporter of tur dhal to India, at 5,000 tons per year between 2014 and 2016,
representing approximately 5% of total Mozambican pigeon pea exports of pigeon pea to
India during this period.

Table 10. Dependence on the Indian Market, 2012-16.

2012 2013 2014 2015 2016 Média

Pigeon Pea Mozambique 52.3 62.4 78.2 99.3 131.1 84.7

1. Export (´000s Tanzania 75.3 128.7 125.2 109.0 172.8 122.2
tons) Malawi 60.6 34.5 54.4 72.3 50.0 54.3
Myanmar 429.3 289.8 344.7 308.3 253.5 325.1
Pigeon Pea Mozambique 30.0 36.3 52.2 97.6 104.4 64.1
2. Export (million Tanzania 47.9 76.3 91.3 118.3 119.8 90.7
USD) Malawi 35.4 22.1 38.7 72.9 47.3 43.3
Myanmar 281.6 204.5 251.6 306.7 313.6 271.6
Pigeon Pea Mozambique 52.1 62.0 75.5 97.6 128.5 83.1
3. Export to India Tanzania 74.3 122.9 115.5 104.9 168.6 117.2
(´000s tons) Malawi 57.8 27.9 39.5 65.5 44.9 47.1
Myanmar 374.2 236.3 300.1 257.2 212,2 276.0
Mozambique 99.7 % 99.4 % 96.6 % 98.3 % 98.1 % 98.1 %
4. India (%) Tanzania 98.6 % 95.4 % 92.3 % 96.3 % 97.6 % 95.9 %
Malawi 95.3 % 80.9 % 72.7 % 90.7 % 90.0 % 86.7 %
Myanmar 87.2 % 81.5 % 87.1 % 83.4 % 83.7 % 84.9 %
Processed Mozambique 2.1 8.0 5.0 5.0
5. pigeon Pea Tanzania 0.7 1.6 0.2 0.8
Export to India Malawi 4.2 6.8 1.0 4.0
(´000s tons) Myanmar 2.8 1.4 0.6 1.6
Source: Authors, based on data from COMTRADE

18
This analysis is complicated by the fact that many countries do not report dhal imports under the pigeon pea code (line
071360), even if it is tur dahl, using the line for “other pulses” instead (071390).

36
 5. The Possibility of Diversification to Other Pulses
The previous analysis suggests that there may be some possibility of diversifying to other
pigeon pea markets. It is clear, however, that this possibility is very limited, due to the
strong Indian dominance of global pigeon pea consumption and imports. Figure 14 shows
that the international pigeon pea market is extremely concentrated, with India accounting
for 90% of global imports between 2011 and 2015. Although India is also the largest
importer of other pulses used for dhal production, its degree of domination of global
imports of these pulses is much more limited. The country accounts for “only” 29% of
global chickpea imports, which has significant markets in other South Asian countries and
in the Middle East. In regard to Mung beans and urad beans, India accounts for 53% of
global imports, more than half, but other significant markets do exist in East and Southeast
Asia. It is important to note that the total size of the international pigeon pea market, with
an annually traded volume of 550,000 tons on average, is much lower than that of mung &
urad beans (> 1 million tons), chickpeas (> 1.5 million tons) and lentils (> 2.5 million tons).

From a long-term perspective, all types of pulses have significant scope for international
market diversification, due to a trend of growing pulses consumption in Western countries.
In these markets, consumers are becoming increasingly aware of the effects of their
consumption patterns on personal health, but also on climate change, poverty and
inequality (CBI 2016). The growing number of vegetarians can be seen as part of this trend.
Mintel, a well-renowned market research firm, has found, for example, that 12% of people
in the United Kingdom consider themselves to be vegetarian, and that this share is as high
as 20% in the age group 16 to 24. In addition to vegetarians, there is also an increasing
number of flexitarians, who consume meat only once or twice a week. For these consumers,
pulses constitute a highly attractive alternative source of protein.

37
Figure 14. International Market of Chickpea, Mung & Urad beans, Lentils and Pigeon Pea,
2011-15 average, in tons

Source: Authors, based on COMTRADE data

In Mozambique, the share of pigeon pea exports in the total volume of pulses exports has
been growing in recent years, from 72% in 2012 to 88% in 2016. In this regard, lessons
could be learnt from neighbouring Tanzania, where, despite a similar or even stronger
boom in pigeon exports, the share of pigeon pea in total pulses exports has remained stable
at around 55%.

During the period of rapidly growing pigeon pea exports, Tanzania was also able to
simultaneously increase the export of other pulses, such as mung beans and chickpea, as
shown in Table 11. Mung bean exports increased from 22,000 tons in 2012 to 69,000 tons
38
 in 2016, worth USD 62 million. The export of chickpeas, meanwhile, increased from 39,000
tons to 65,000 tons (USD 64 million) in 2016. Similarly, Kenyan mung bean exports grew
from 6,000 tons in 2012 to 46,000 tons in 2016. According to the same table, Mozambique,
on the other hand, exported only 16,000 tons of mung bean in 2016, while the production
and export of chickpea has been virtually non-existent. Given that some mung bean
production is already taking place in Mozambique, its expansion seems a viable option.
Another advantage is that Mozambicans like to consume mung beans, much more so than
pigeon pea.

Table 11. Pulses Exports, 2012-16, in tons and USD.

2012 2013 2014 2015 2016 Average

Pulses Export (HS Mozambique 72.8 80.7 96.5 110.6 148.4 101.8
0713) (000s tons) Tanzania 155.2 222.6 219.2 208.3 313.0 223.6
Malawi 70.7 46.8 62.6 75.7 54.7 62.1
Kenya 15.1 74.4 53.4 52.5 84.7 56.0
PIGEON PEA
Pigeon Pea Export Mozambique 52.3 62.4 78.2 99.3 131.1 84.7
(´000s tons) Tanzania 75.3 128.7 125.2 109.0 172.8 122.2
Malawi 60.6 34.5 54.4 72.3 50.0 54.3
Kenya 0.8 10.3 4.8 10.1 25.6 10.3
Pigeon Pea Export, Mozambique 71.8 % 77.4 % 81.0 % 89.7 % 88.3 % 83.2 %
% of legumina Tanzania 48.5 % 57.8 % 57.1 % 52.3 % 55.2 % 54.6 %
export Malawi 85.7 % 73.7 % 86.9 % 95.5 % 91.3 % 87.4 %
Kenya 5.4 % 13.8 % 8.9 % 19.2 % 30.2 % 18.4 %
MUNG BEAN
Mozambique 9.8 10.6 12.8 7.9 15.7 11.4
Mung Bean Export Tanzania 21.6 48.3 40.1 27.1 69.1 41.2
(´000s tons) Malawi 1.6 3.1 2.3 1.1 0.9 1.8
Kenya 6.0 23.3 14.6 33.0 46.2 24.6
Mozambique 7.1 9.4 11.5 8.6 13.2 9.9
Mung Bean Export Tanzania 14.6 34.7 40.4 29.9 61.6 36.2
(USD Million) Malawi 1.4 2.8 2.7 1.1 0.9 1.8
Kenya 4.9 19.9 15.2 36.2 43.9 24.0
CHICKPEA
Chickpea Export Mozambique 0.2 - - - - 0
(´000s tons) Tanzania 39.2 29.0 34.6 59.0 64.6 45.3
Malawi 1.0 0.4 0.4 0.1 0.3 0.5
Kenya 0.7 0.2 0 0.1 0.7 0.4
Chickpea Export Mozambique 0.2 - - - - 0
(USD Million) Tanzania 32.0 16.2 17.0 40.1 63.7 33.8
Malawi 0.9 0.4 0.4 0.1 0.3 0.4

39
 Kenya 0.7 0.2 - 0.1 0.6 0.3
Source: Authors,based on COMTRADE data

In addition to pulses used for dhal production, it is important to also consider the potential
of diversification towards other types of beans, such as cowpea (Vigna Unguiculata) and
common bean (Phaseolus vulgaris). One advantage of concentrating on these crops is that
the tradition of local consumption is much stronger, both in Mozambique and neighbouring
countries. Therefore, for the Mozambican farmer, the market may be much less volatile, as
there is more flexibility for regional markets to adjust consumption on the basis of price
and availability.

A rapid analysis of trade data suggests that the international market for cowpea is small, at
around 100,000 tons per year, and even more importantly, that India also dominates this
market, accounting for a substantial 63% of global imports (Figure 15). On the other hand,
the international market for common beans is very large, at almost 1,800,000 tons per year
and extremely diversified. It is interesting to note that Angola and South Africa are among
the largest importers, absorbing on average 63,000 and 55,000 tons per year, respectively.
Despite the difficulty in determining the exact types of beans 19 imported by these
countries from the trade data, it is clear that the speckled sugar bean 20, widely produced
and consumed in Mozambique, represents a significant part.

Figure 15. International Market for Cowpea and Common Beans, in Tons, 2011-15

19
The Common Bean (Phaseolus Vulgaris) includes many varieties of beans.
20
Known as feijão catarino in Mozambique and Angola, and in many countries as pinto bean.

40
 Source: Authors, based on COMTRADE data.

In summary, the international market for pulses is vast, dynamic and diversified. In this
context, it will be important for Mozambique to diversify its participation in this market, in
addition to pigeon peas. In particular, this diversification effort could focus on mung bean
and common bean, crops that are suitable for cultivation by Mozambican smallholders, and
which have more diversified markets at the international, regional and national level.

6. Recommendations
The Mozambican pigeon pea value chain developed largely in reponse to Indian demand.
During the last decade, its promotion was stimulated by NGOs, with the support of
international donors. It is estimated that at least 1.2 million smallholder farmers were
engaged in pigeon pea production in 2017 and that the export of pigeon peas from the
2016 season generated at least USD 120 million in foreign exchange earnings.

Despite this success story, reported in several studies, the current context, as described in
this study, shows that the market for pigeon pea is not guaranteed, being excessively
dependent on one single country, India. The 2017 season clearly revealed the danger of this
depedence, causing hardship for the farmers who relied on pigeon pea as their main cash
crop, and indicates the importance of defining a strategy and a set of measures to deal with
this reality in a structured manner. The measures discussed below are summarized in
Table 12.

41
 6.1 Short-Term Measures
An estimated 1.2 million Mozambican farmers invested in pigeon pea production in the
2016-17 season, with an expected total harvest of approximately 250,000 tons. However,
contrary to all forecasts and expecations, India, the destination of 90% of global pigeon pea
exports, had a record pulses production in 2017, largely satisfying domestic demand. In the
particular case of pigeon pea, production increased by more than 80% compared to the
year before, meaning that, if well managed, India would not need to import any pigeon pea
during the next two years. This situation led the Indian Government to introduce a pigeon
pea import quota, which resulted in the drastic fall of the pigeon pea price to the
Mozambican farmer, from approximately MZN 45/kg in 2016 to MZN 5/kg in 2017.

At this price, and taking into account estimated costs of production, an emerging farmer
who had hired additional labour will face a loss of up to MZN 9000/ha, while the
smallholder farmers using exclusively family labour will not earn the money they had
expected and consequently will not have the financial means to sustain basic expenses.
Even if India honours its commitment to purchase 125,000 tons from Mozambique in the
2017/18 financial year, this would amount to approximately half of total production,
meaning that the other half of the production is at risk of getting spoilt, due to a lack of
market demand and storage capacity. This scenario represents a calamity, with a severe
impact on the income of many Mozambicans. Considering an average of 5 people per
household, this crisis is estimated to directly affect 6 million Mozambicans, or more than
20% of the total population, and may have further multiplier effects. The resulting lack of
purchasing power on the part of the farmers generated local economic crises in those
districts where farmers depended most on pigeon pea and had few other cash crops, which
is particularly the case in Middle and Upper Zambézia. In addition, the situation has left
farmers unable to invest in the next agricultural season, which could impact the local
labour market.

As a way of mitigating the negative impact caused by the price collapse, the Government of
Mozambique, together with its partners, could take the following actions:

42
• Clearly define procedures for export under the Memorandum of Understanding with
the Government of India. In 2017, uncertainties regarding the validity of the MoU
and non-transparent methods of allocating quotas and Certificates of Origin
paralyzed exports and intensified the price fall. In order to avoid such uncertainty, it
is important to establish a platform for regular dialogue between pulses exporters
and the Mozambican Government. A first meeting should be convened as soon as
possible and thereafter every six months, and whenever necessary.

• Further meetings should be organized in the main pigeon pea producing provinces,
in order to inform farmers and other value chain actors of recent developments,
understand their impact and implications and to discuss prospects for the next
season. These meetings would have a much broader audience than just the
exporters, specifically targeting farmer associations, local traders and local
government officials.

• In relation to the next agricultural season, MASA should urgently disseminate

information on current and expected market conditions. The Indian Ministry of
Agriculture´s first official estimate of 2018 pigeon pea production, which will be
harvested soon, is 3.99 million tons. Although this represents a decline from 2017, it
would still constitute another bumper harvest, above the normal demand of the
Indian market. Therefore, there is no prospect of a substantial price increase to the
Mozambican farmer in 2018.

• Evaluate the possibility of animal feed producers buying a part of the excess
production, to integrate in feed for poultry, fish and other animals.

• Support farmers, particularly in the districts of Middle and Upper Zambezia, with
access to seeds of alternative cash crops, such as mung bean, which has the
advantage of being a short-cycle crop. Such an intervention could guarantee a much-
needed injection of cash into the rural economy at the time of the mung bean
harvest in April-June 2018. Given that, in the context of the MoU between India and
Mozambique, the donation of a considerable amount of improved pulses seeds for

43
 the 2017-18 season was being prepared, MASA should request the Government of
India that the originally planned pigeon pea be exchanged for seeds of other pulses,
such as mung bean.

6.2 Measures to Improve Information Systems

6.2.1 Production Statistics and Price Information

The design and implementation of effective public policies depends on access to structured
and reliable data. In the case of pigeon pea, no statistical information is available in the
major data systems, whether national or international. Pigeon pea production statistics are
hidden in the general category of beans, even though the various types of beans and peas
are distinct products with different markets. The following points should be considered for
improving pigeon pea statistics:

• In recent years, some Mozambican districts started, independently, to specifically

monitor pigeon pea production. This provides a useful basis for the inclusion of pigeon
pea, in an itemisedmanner, in official national-level statistics. MASA should, as soon as
possible, structure the process of pigeon pea related data collection, in the first instance
by encouraging the other districts in the major producing areas to follow the example of
the pioneering districts in this respect. Secondly, MASA should compile the pigeon pea
statistics of all districts in a systematic way, so that they can be integrated in the official
national-level reports on the agricultural sector. In this way, MASA will be able to
closely monitor local dynamics and inform public policy aimed at the sub-sector.
• MASA should request FAO to include estimates of pigeon pea production on FAOSTAT.
Many studies and market analyses, including in India, use this platform for information
on global production. In these documents, however, Mozambique does not even appear,
which has a negative impact on the recognition of Mozambique as an important player
in this market, among key actors in India and the rest of the world.
• Finally, MASA should include detailed and district-specific information on pigeon pea
prices in the Agricultural Market Information System (SIMA).

44
 6.2.2 Market Intelligence
Although almost all of Mozambique´s pigeon pea production is destined for export, the
information gathered in the field revealed that only the exporters themselves are
effectively aware of international market dynamics. Intermediaries and warehouse
operators only have superficial knowledge of the international market, while most farmers
have no idea at all.

The 2017 season provided a stark reminder of the danger of making production decisions
without prior and profound knowledge of market conditions. Therefore, MASA should
create a pulses market intelligence group, by identifying and training staff who will be
tasked with closely following international market developments and presenting their
analyses in the internal councils of the Ministry on a quarterly basis. Special attention
should be paid at the end of September, when the Indian Ministry of Agriculture publishes
the first official estimate of kharif-season pigeon pea production, which is harvested in
January of the following year, based on estimates of cultivated area and the evolution of
monsoon rains. In September 2016, more than two months before farmers started planting
in Mozambique, the forecast that 2017 would witness a record pigeon pea harvest in India
was already available. While it would have been difficult to prevent the current situation
based on that information, it would have been possible to mitigate the negative effects, or
at least to anticipate them.

Thus, better knowledge of the international market can serve as a strategic tool for MASA
to guide farmers, farmer associations, local traders and NGOs about likely market
dynamics, which could help to avoid the repetition of the scenario experienced in 2017. As
a first step, it is suggested that MASA should identify a partner that can support the
capacity-building of selected staff and the organization of relevant statistical information.

45
 6.2.3 Monitoring of Trade Data
According to official Mozambican data, the total export value of pulses amounted to just
over USD 20 million per year in 2015 and 2016. In contrast, international trade data show
that India reported the import of more than USD 110 million of pulses per year from
Mozambique over the same period, revealing a massive discrepancy. In the case of
Tanzania, no such discrepancy between national export data and Indian import data was
found (see Annex I). The causes of the discrepancy in the case of Mozambique have not yet
been investigated in depth, but it could point at significant tax evasion and/or a very
serious failure in properly recording exports. Considering this, it is recommended that the
Ministry of Economy and Finance launch an assessment to determine the causes of the
discrepancy and identify mechanisms to address these.

Finally, given its weight in the balance of payments, customs should ensure that pigeon pea
exports get reported under the correct code of the tariff schedule (Pauta Aduaneira). At the
international level, a specific line was created for pigeon peas in the 2012 revision of the
Harmonized System (HS), with the code 071360. However, the Mozambican authorities
(customs) have not yet started to use this line, usually reporting pigeon pea exports under
071390, which refers to “other" pulses.

6.3 Measures to Promote Diversification

During the last two decades various organizations have invested a great deal of effort in
promoting pigeon pea cultivation among Mozambican farmers, in the belief that the market
was guaranteed and growing. However, for the reasons analysed in this study, access to the
most important pigeon pea market was suddenly compromised in 2017. As a result,
farmers were forced to accept prices far below their expectations, if they could find any
buyers at all. The most important underlying reason of this calamity is the strong
dependence on a single market, namely India. In this context, there is an urgent need for
diversification, in the following dimensions:

46
 6.3.1 Market Diversification
For the specific case of pigeon pea, Mozambique has little room for manoeuvre since the
market is heavily concentrated on a single country, India. Having said that, the government
can promote the country's image as an important producer of pulses in general, using its
network of diplomatic representations in key markets. Encouraging further investments in
pigeon pea processing facilities, to produce dhal, can also support the diversification effort.
While India is practically the only importer of raw pigeon pea, the tur dhal market is much
more diversified, even if small, with pockets of demand in countries with a sizeable Indian
diaspora.

Finally, from a long-term perspective, Mozambique should seek to identify partners in

Europe and North America to promote the consumption of pigeon pea and other pulses.
For vegetarians, a rapidly growing consumer segment in these key markets, pigeon pea and
other pulses are an attractive alternative source of protein. A focused marketing strategy,
emphasizing the advantages of pigeon pea consumption, from a nutritional and
climatological perspective, but also in terms of poverty reduction effects, certainly has the
potential to stimulate consumption in the Western world.

6.3.2 Promote Domestic Consumption

Pigeon pea is a low-cost, high-nutrient food rich in starch, protein, calcium and an excellent
source of vitamin A. Due to the lack of statistical data, it is difficult to determine the level of
domestic consumption, but it is estimated to have been equivalent to approximately 10-
15% of production in recent years, when prices were high. However, in neighbouring
Malawi at least half of production is consumed locally, suggesting there could be scope for
increasing domestic consumption in Mozambique. This notion is further supported by
anecdotal evidence that consumption patterns differ substantially between different
Mozambican districts and regions.

Considering that more than 45% of the Mozambican population lives below the poverty
line and at least 40% of children suffer from chronic malnutrition, increased pigeon pea
consumption could help to improve food security. Moreover, the rapid expansion of pigeon
47
pea production, which also has substantial agronomic advantages, shows that pigeon pea
cultivation is suitable within the productive system of Mozambican farmers, particularly
through its aptitude for intercropping with maize. Thus, promoting domestic pigeon pea
consumption can serve various different objectives simultaneously. Besides improving food
security, it is also a way of developing an alternative market for a crop that is highly
suitable for Mozambican farmers. Therefore, the government and its partners could raise
awareness among rural and urban communities on the benefits of pigeon pea consumption
and introduce it in national food assistance programs, such as school meals and
humanitarian aid.

6.3.3 Diversification of Pulses Production

The international market for pulses other than pigeon pea is vast and diverse, certainly
offering room for Mozambique to increase its share of global exports. In this sense, MASA
should promote diversification of production towards other pulses with larger and more
diversified markets, such as mung bean and common bean.

• Mozambican production of most major pulses that are used to produce other types
of dhal, such as chickpea, lentils and urad beans, is very limited or non-existent.
Therefore, as a first step, a detailed mapping exercise of agro-climatic potential
should be carried out for each of these crops, like Ghanem et al. (2015) do for lentils
(Lens Culinaris) in East Africa.
• In the case of mung beans, production of which is already taking place in some
areas, such a mapping exercise should also be carried out for the whole country.
Simultaneously, however, the government and its partners can already start to
promote the expansion of existing production, by addressing the issue in public-
private dialogue with traders, and by improving access to mung bean seed. In
particular, IIAM should carry out the necessary research to develop officially
released mung bean varieties.
• In relation to common beans, which are widely consumed in Mozambique and
neighbouring countries, further value chain studies should be carried out, because

48
 there is currently very little information available on the various types of common
bean.
• Finally, the government should encourage donors, NGOs and the private sector to
focus their agricultural interventions and promotion efforts among farmers on
pulses other than pigeon pea, which has already been well established in rural
Mozambique.

Table 12. Action Matrix

INTERVENTION MEASURES

RESPONS PERIOD
ACTION STEPS EXPECTED RESULTS
IBLE

SHORT-TERM MEASURES

• National meeting with pigeon pea First Improved transparency and

exporters to clarify the methods and meeting clarity among exporters regarding
criteria used for allocation of export quotas December export procedures, mechanisms
Public-Private
MIC and issuing of certificates of origin. 2017. and regulations.
Dialogue
• Establishment of a platform for ongoing Improve the quality of public
dialogue between pulse traders and the Every 6 policy related to the pulses
Government. months sector.

• Workshop in Zambezia with farmer

Dissemination January
associations, development partners,
2018 The main value chain actors are
of Information traders and exporters.
informed about the factors
on the Pigeon
MASA • Inform all SDAEs and extension workers responsible for the 2017 price
pea Market about the prospect of the 2018 pigeon pea December collapse and about what can be
market, so that they can then further 2017 expected for the coming year.
disseminate the information among
farmers.
• Promote cultivation of mung bean,
Dec 2017 -
common bean and sesame, particularly in The peasants received the seeds
Promotion of Jan 2018
the districts of Middle and Upper and the technical assistance plan.
Short Cycle
Zambézia.
Crops MASA
• Request the Government of India to send
The Government of India
seeds of pulses other than pigeon pea in December
received MASA letter and seeds
the context of the Memorandum of 2017
shipped to Mozambique.
Understanding.
MEASURES TO IMPROVE INFORMATION SYSTEMS

49
 From the
• Systematic and periodic compilation of Data compiled and included in
2017-18
Improved statistical data on the production of pigeon national reports on the results of
pea by season and by district. season the agricultural season.
Production
Statistics and
MASA - • Request FAO to include estimates of December National Production estimates
Price MIC pigeon pea production on FAOSTAT 2017 available online on FAOSTAT.
Information
From the Pigeon Pea price dynamics
• Include pigeon pea prices in different 2017-18 presented in SIMA reports, and
districts on SIMA season disseminated among SDAEs and
farmers.
• Identify and train staff at MASA/MIC to
Market
monitor dynamics of the international Staff have been identified and
Intelligence MIC -
pulses market, particularly pigeon pea, and 2018 trained, and monitoring platform
MASA
disseminate the conclusions of the and market analysis in operation.
analyses, inside and outside the Ministry.
Identification of (i) causes of the
First Half of discrepancy between
• Improved monitoring and recording of 2018 Mozambican export data and
export of pulses Indian import data, and (ii)
Monitoring of MEF, measures to reduce the
Trade Data BM, INE, discrepancy.
MASA e • Train Customs and MASA officials in the
MIC ports to correctly distinguish and record 2018 Port officials trained on
different types of pulses. For pigeon pea in identification of different pulses
particular, start using the correct line of and correct corresponding tariff
the Customs Tariff Schedule, number lines for reporting of exports.
071360.

MEASURES TO PROMOTE DIVERSIFICATION

• Promote the country's image as a producer Leading buyers are aware that
of pulses using diplomatic representations Mozambique is a reliable source
Market 2018
in key target markets. of quality pulses.
Diversification MASA -
MIC Exports of at least 20 thousand
• Identify partners in Europe and America to
2019 tons of Mozambican pulses to
promote consumption of pulses produced
European and American markets
in Mozambique
in 2019.
Promote • Promote domestic pigeon pea
consumption through awareness creation 2018 Expand domestic pigeon pea
Domestic
MASA - campaigns. market, increasing local
Consumption MINEDH consumption, reaching 150,000
• Introduce pigeon pea in school feeding and tons by 2020.
2018
food assistance programs
• Detailed mapping of agro-climatic potential Studies compiled and shared with
of other pulses, such as mung beans, development partners, farmer
Diversification chickpeas, lentils and urad beans, and 2018 associations, traders, exporters,
of Pulses MASA corresponding market studies among others.
Production
• Encourage development partners and Commitment of development
NGOs to focus on other pulses in their partners to promote other

50
 interventions and programs in the 2018 pulses, based on a detailed plan
agricultural sector. of action to promote
diversification.
• Release of improved varieties of other Mung bean varieties released
2019
pulses, particularly mung bean

Annex I – Discrepancies in Trade Data

Table 13 compares the official INE data on the Mozambican export of pulses (HS 0713
category, which includes pigeon pea and other beans) with other countries’ data on the
import of pulses from Mozambique, revealing a very significant discrepancy, of USD 100
million per year in 2015 and 2016.

Table 13. Discrepancy in Trade Data on Mozambican Pulses

Year MOZ Export of World Import of INE data as % of
Pulses – INE data Mozambican Pulses real exports
(Million USD) (Million USD)
2012 23.8 43.8 54 %
2013 22.5 51.0 44 %
2014 43.3 67.0 65 %
2015 19.6 108.9 18 %

51
 2016 24.7 119.0 21 %
Source: INE, ITC Trade Map

This discrepancy suggests that foreign exchange earnings from the export of pulses are
under-recorded on the Balance of Payments, compiled annually by the Bank of
Mozambique, using INE data, which are in turn based on Customs data. Looking at the
balance of payments report of 2015, for instance, pulses are not even mentioned in the
accompanying analysis, while judging by partner import data, pulses may have been the
third largest agricultural export product that year, following tobacco (USD 257 million) and
sugar (USD 137 million). In 2015, the sum of all exports excluding megaprojects was USD
1,356 million, which means that this figure would be higher by 6.6% if the actual value of
the export of pulses had been taken into account.

It should be noted that this issue of an enormous discrepancy in pulses trade data does not
appear with respect to the export of pulses by neighbouring Tanzania, the largest African
exporter of pulses to India. Tanzania's pulses export data correspond almost perfectly with
the Indian data on the import of pulses from Tanzania.

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