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The Indian company, the Export Trading Group (ETG), has effectively closed its factory in the central Mozambican city of Beira that was set up two years ago to process pigeon peas.
According to a report in the Beira daily paper “Diario de Mocambique”, ETG halted operations at the factory because it was no longer able to sell the product in the intended market, India. The decision was taken in December, and means that 100 workers in the Beira plant have now lost their jobs.
Narasimham Nagala, the ETG manager in Beira said the current scenario penalises not only the factory workers, but also all those Mozambican farmers who grew pigeon peas on a large scale in the belief that there was a guaranteed market in India (where pigeon peas are known as dhal, and are a key ingredient in Indian cuisine).
A memorandum of understanding on the export of pigeon peas was signed between India and Mozambique in 2016, during a visit to Maputo by Indian Prime Minister Narendra Modi. The deal was supposedly valid for five years.
But in August 2017, the Indian authorities imposed quotas on pigeon pea imports, moving this crop from the “free” to the “restricted” category of imports. The new rules state that only 200,000 tonnes of pigeon peas can be imported in any one fiscal year. In the 2016/2017 fiscal year, which ended on 31 March, India imported 703,540 tonnes of pigeon peas, from many countries.
These imports came on top of a bumper pigeon pea crop in India, and were blamed for depressing the prices paid to Indian producers.
Despite assurances from the Indian High Commission in Maputo that Mozambican producers would not be hit by these restrictions, in fact farmers found they were unable to sell all the pigeon peas they had planted, and the crops rotted in the fields.
“Mozambique had a pigeon pea export quota of about 100,000 tonnes a year”, said Nagala. “As the main company in the area, ETG pledged to do its part but several factors are influencing the process. Last year we exported 40,000 tonnes, but we still have 15,000 tonnes in storage. We have lots of pigeon peas in our warehouses, because Asia suspended its purchases”.
This affects ETG factories not only in Beira, but also in Nampula, Nacala and Gurue, all of which have ceased their activities.Source: AIM