Trade Talk with Faisal Anis Majeed/
The challenges and opportunities of the Pakistani pulses industry

Faisal Anis Majeed, COO of Bombi’s Group, has deep experience and extensive ties throughout the country’s multibillion dollar food trading sector. Jesse Sam caught up with him to get his outlook for Pakistan’s pulses sector

Can you tell us a bit about your background and involvement with Pakistan’s pulses sector? What does Bombi’s Group do?

Bombi’s Group is a family business based in Pakistan. We have been operating for more than 35 years as an importer, exporter and indenting house of agro commodities, including pulses, rice, oil seeds, sugar, corn/maize, wheat and other commodities. 

The business was founded by my grandfather, who started with a pulses processing unit. My father later joined, as did my uncles. Back in 2010, after completing my bachelor’s degree, I followed in their footsteps. 

My family has a long tradition of promoting Pakistan’s pulses sector. In the 1980s, my father, Mr Anis Majeed, joined the family business. He was also involved with the local pulses association in Karachi and served as its General Secretary for 14 years and then Chairman for 16 years, representing Pakistan in various national and international forums. 

I have tried to continue that tradition. After joining the company, I helped to set up GPC Young Professionals (GPCYP). GPCYP is a membership group for emerging leaders in the global pulses sector to learn from more experienced peers. It’s also a platform to share knowledge and best practices, as well as build trusted business relationships and personal friendships that can spur cooperation across continents and cultures.

Apart from GPCYP, I am also currently serving on the Executive Committee of the Global Pulse Confederation; as Deputy Convener of the Rice Committee for the Federation of Pakistan Chamber of Commerce and Industry; and representing the Young Rice Exporters’ Association, as Secretary and Treasurer. 

So it’s safe to say that I am deeply involved and committed to the global pulses and agro-trading community! 

You certainly are — I’m sure that depth of experience and breadth of networks gives you a unique perspective on the market in Pakistan. Pakistan is one of the world’s biggest importers of pulses. There is a consistent and significant gap between domestic demand and production. Can you identify the key factors which constrain local supply?

Yes, so Pakistan has been importing pulses since the mid 1980s, around the time Bombi’s group was founded. I would say there are three key reasons which help explain this dynamic.

The first reason is the climate. Pulses are grown in rain-fed areas. Our production is very dependent on the availability of rain at the right time. But Pakistan can be quite a dry country, so our production is vulnerable to these factors. 

The second reason is a lack of government support. For example, there are no minimum pricing or purchasing policies in place, which would provide greater certainty to farmers and incentivise them to plant more pulses. Instead, these producers focus more on other crops, like wheat and cotton. In some parts of the Punjab, they’re even planting trees because they are getting much better returns from cutting down the wood and making furniture. Also, there is a lack of investment in research and development to help farmers use more efficient technologies and processes. 

The third reason is historical. It goes back to 2010 and the bad experience farmers had with selling pulses that year. The export of pulses is banned in Pakistan. In 2010, there was a bumper crop of desi chickpeas. My dad and other traders and farmers lobbied the government to lift the export ban but the government wasn’t forthcoming. As a result of the excess supply, the market crashed: prices went from around 80 rupees per kg to 40 rupees. A lot of traders and farmers went bankrupt and the memory of that bad experience still lingers today.

That’s a comprehensive overview and it’s interesting to note the historical perspective. Have things shifted since then? Is the government doing anything to help increase pulses production over the medium-to-long term?

To be honest, the government is not focused on pulses at the moment. Rice is our biggest agro-export, it’s an excess crop for Pakistan. So the government is looking at ways to boost output and productivity. The consequence of that is a lack of focus on pulses. There are no plans to increase acreage or invest in R&D. 

There are also wider issues in the agriculture sector right now. Last year, Pakistan had to import sugar and wheat; and tenders have also been issued to Russia and Ukraine to import wheat for 2022. This is a disappointing reversal, as just a few years ago Pakistan was exporting sugar and wheat (which is an important crop for us). This situation also reduces the strategic focus on pulses.

That makes sense. So if Pakistan is set to continue being a major pulses importer for the foreseeable future, what are some of the key markets you buy from?

Our biggest product is desi chickpeas, which come from Australia. We import lentils mainly from Canada and Australia. We also have chickpeas from a broader range of countries, including the United States, Canada, Mexico, Argentina, Russia and Turkey. Yellow peas come from Russia and Canada. Another important import is black matpe from Myanmar. 

There was news from Turkey in November about a ban on chickpea exports. Has this affected Pakistan at all?

Not really. Recently, the price of Turkish chickpeas has been quite high. So traders have been switching to lower caliber chickpeas from other countries, which are cheaper. Russia has picked up a lot of that trade but stocks there are starting to run low. Turkey has recently extended the export ban for the next year. There are no Turkish chickpeas left. Hopefully after the next harvest, they will have more peas to export to the rest of the world.

What about the ongoing global supply chain and freight crisis - how is that affecting Pakistan as a major importer of pulses?

The global supply chain crisis has been very challenging across our agrocommoddities sector, both for exporters and importers. Exporters have been struggling with logistics: securing containers and spaces on vessels. 

Importers have faced a wider range of issues. The most significant is the uncertain schedules for cargo arrivals. The timing keeps getting shifted, which causes logistical and financial disruption throughout the market. The way our stock is being transported is also becoming an issue. We have one single vessel carrying goods from several destinations, which creates an extra financial administrative burden. We are also facing reduced free detention time at ports, down to 7-10 days (from 14) and overloaded storage facilities. The time it takes to extract your goods from a port has gone up from five days to 10. So there have been a lot of challenges which are causing instability in the market.

Is that contributing to higher inflation throughout the country? Pakistan has seen higher food prices recently.

Pakistan has seen higher food prices this year but we are not alone — I’d say this is a global phenomenon. And, of course, the supply chain issues directly contribute to that. The freight component of prices for things like pulses and other agro imports was just 10 percent; now I’d say it is around 25 percent. So that is a significant increase. 

But it’s also true that we’ve seen lower crop yields in many of the countries where we import from, which is contributing to higher prices. And, as I mentioned, our domestic production of sugar and wheat is lower, which is necessitating increased imports, which feeds into higher prices.

As we enter 2022, what are the key trends you will be watching for in Pakistan’s pulses sector?

Overall, I am very positive about the pulses sector in 2022. With a growing portion of our population vaccinated, hopefully we can see some easing of restrictions and travel bans, which will be good for the economy overall. We are also expecting our local crop of desi chickpeas (due in March/April 2022) to be better than previous years — sowing conditions have been favourable this year. I would also like to see Pakistan start diversifying the way we use pulses — expanding from household consumption into the FMCG sector, with things like crackers and making proteins and other innovative ideas.