Poor Indian pea crop may boost lentils

India’s pigeon pea crop appears to be in trouble, which is good news for Canadian green lentil growers, say pulse crop analysts.

Seeding as of July 20 was 16 percent behind last year’s pace and 13 percent behind the long-term average, according to India’s ministry of agriculture.

Monsoon rains are rated normal in the eastern two-thirds of the country and deficient to scanty in the western one-third, which is where the majority of the pigeon pea crop is grown.

“It’s a pretty big country so you can have heavy monsoon rains in one part of the country and almost nothing in the other part. That has kind of been the situation this year,” said Chuck Penner, president of LeftField Commodity Research.

Nationwide, this year’s monsoon has delivered 19 percent less rain than normal as of Aug. 1, according to the India Meteorological Department.

Penner said the smaller acreage and poor rainfall will likely result in a reduced Indian pigeon pea crop. Prices have been on the rise in India, which is another indication that traders are expecting a short crop.

Indian consumers have come to realize that Canadian green lentils are a direct substitute for pigeon peas.

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The last time there was a shortfall of the crop in 2009-10 Canada exported 115,000 tonnes of green lentils to India.

Penner said green lentil demand is incredibly static in almost every other market where Canada ships product.

“Really the only swing variable in green lentil demand is India. When we do have larger supplies we really need India to buy them,” he said.

This is expected to be one of those years of excess supply. Statistics Canada estimates growers planted 1.14 million acres of large green lentils, rivaling the 2010 crop of 1.22 million acres. There are more large greens than red lentils for the first time in five years.

“We’re looking at a fairly large crop,” said Brian Clancey, editor of Stat Publishing.

Greg Kostal, president of Kostal Ag Consulting, told delegates attending the Canadian Special Crops Association conference at the end of June, that he expects 650,000 tonnes of large green lentil production, which could be burdensome given there is about 400,000 tonnes of annual demand for the crop.

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Clancey agreed with Penner that Indian demand will be crucial in this new crop year.

“It’s really important because we’re facing a surplus of lentils and probably green lentils in particular. It almost echoes what we saw several years ago,” he said.

Large green lentil prices have been trending down since early 2011. They fell 16 percent below the recent three-year average during the 2010-11 crop year and are now cheaper than yellow peas, so they could be an attractive buy, said Clancey.

Penner is hearing rumours that Indian buyers are already “poking around” to see what they can find in Canada.

“I don’t know that there’s a lot of trade happening but there’s lots of interest,” he said.

That’s a good sign for Canadian lentil growers.

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“There wouldn’t be a lot of light at the end of the tunnel in the lentil situation if India isn’t there,” said Penner.

  • Raghavan

    Though it is true that India’s pigeon pea crop is in trouble which is evident from the rise in its prices recently, in my opinion, it might be too early to assume the situation may favor Canadian green lentils. I take “guarded optimism” in expecting the price-supersensitive Indian traders will rush to import split green lentils from Canada as a substitute for domestic pigeon pea.

    Myanmar has been and continues to be a strong player in catering to the pigeon pea demand gap in India. Of late, African nations (Tanzania and Malawi) emerged as new potential suppliers. So, in my personal opinion, top preference of Indian importers would go to these sources first and then to Canadian green lentils if landed costs are comparable.

    Remember!! the Indian rupee has weakened so much and continues to lose against the USD and CAD. Due to high inflation in the country, the Reserve Bank has not reduced the interest rates so business credit is getting dried up. All these will have significant influence in determining the landed costs of green lentils in India.

    Having said that, I would love to be proven wrong !!!

    Raghavan Sampathkumar
    Agribusiness Consultant
    Chennai, India