Canadian pea crop takes on many challengers

India, Australia seed large crops | But market for Canadian yellow peas won’t dry up as India’s pulse consumption grows

Pea exports to India have slowed in the face of stiff competition from Australia and prospects for a good Indian chickpea crop.

Indian farmers seeded 22.7 million acres of chickpeas as of Jan. 18, up three percent over last year and 14 percent above normal acreage for that date.

The big Indian crop is going in the ground as a record Australian chickpea crop pours into markets in the Indian subcontinent.

“It’s like they upended the wheelbarrow and just dumped it in,” said Stat Publishing market analyst Brian Clancey.

“Pretty amazing movement.”

It all adds up to softening demand for Canadian yellow peas, which are a substitute for Indian chickpeas. Sales to India are down 18 percent through the first four months of the 2012-13 crop year compared to the same period a year ago.

“The bigger the desi chickpea crop in India and the more stuff they import from Australia, the less stuff they need to buy from Canada and the easier it is for them to resist prices for Canadian peas,” said Clancey.

He is starting to think he may have to increase his 2012-13 Canadian pea carryout of 290,000 tonnes and his forecast of 7.67 million tonnes of Indian chickpea production, which is only one percent higher than the previous four-year average.

Sixty percent of India’s chickpea crop is planted in the northern states of Rajasthan, Uttar Pradesh and Madhya Pradesh.

It was dry in that region heading into seeding, and the pattern has continued. A rainfall map produced by India’s Meteorological Department shows rainfall between Jan. 1 and Jan. 23 was “scanty” or “deficient” in Madhya Pradesh and the eastern portions of Rajasthan and Uttar Pradesh.

Drew Lerner, president of World Weather Inc., said Rajasthan and Uttar Pradesh received rain around mid-January. Moisture levels ranged from six to 25 millimetres.

It was welcome precipitation but not enough to restore production prospects in northern India.

“It’s definitely not ideal, and they definitely need more moisture,” he said.

That may come next week. Lerner said two weather systems are developing that could deliver another five to 20 mm of rain across the region.

“We will get some shower activity in February that will be supportive to the crop,” he said.

Lerner downplayed reports of frost damage in India’s chickpea growing region. Temperatures dipped below zero, but the coldest it got was -2 C in some areas.

“Most of the freeze that occurred were light freezes,” he said.

Clancey has spoken to Indian traders who don’t appear overly concerned about production prospects for the rabi (winter) crop.

Chuck Penner, analyst with LeftField Commodity Research, said in his Pulse Market Insight newsletter that desi and kabuli chickpea prices have been dropping in India in anticipation of a big crop.

Clancey said the market for Canadian yellow peas won’t dry up, even if India harvests a big crop, because pulse consumption is always in-creasing there.

“(It) doesn’t mean (farmers) will sell less, but it means that you may find it harder to sell for a high price because they’re not going to have the same sense of shortage,” he said.

The problem is growers aren’t in the mood for lower yellow pea prices when they see green peas selling for twice the price.

“It is really hard to convince a farmer who is aware of this that yellow peas aren’t worth anything compared to green peas,” said Clancey.

As a result, the trade may find it difficult to pry peas away from growers if prices drop because many growers are in a financial position where they don’t need to sell the crop to pay the bills.

The stalemate could result in mounting pea stocks by the end of 2012-13.