Changing conditions Russian pulse exports, down dramatically from last year, are expected to remain at lower levels
Russia’s pulse exports are tapering off after storming onto the world stage in 2011 and 2012.
Shipments from January through September of this year were 364,210 tonnes, down 34 percent from the same period last year, according to the U.S. Department of Agriculture.
Marlene Boersch, a partner in Mercantile Consulting Venture Inc., said exports are down because of a combination of smaller crops last year and this year and a poor quality harvest last year.
Russia’s pulse production fell to 2.17 million tonnes last year, down from 2.47 million tonnes the previous year, according to the USDA.
There are no official statistics for this year, but Boersch has heard from trade sources that it is probably around 1.6 million tonnes.
It means there probably won’t be a big export program in 2013-14.
There is also stiff competition for transportation infrastructure.
SovEcon estimates Russia harvested nearly 90 million tonnes of grain this year, up from about 71 million tonnes last year.
Boersch said shippers need to prioritize what moves, and pulses don’t appear to be high on the list.
“They have been very aggressive on wheat into the Middle East, for example,” she said.
The poor quality of last year’s crop is also preventing pulse movement.
“There were lots of complaints in India,” said Boersch.
Indian buyers are reluctant to forward purchase this year’s crop because of the problems they had with last year’s crop. They will buy elsewhere if product is being sold for a similar price.
Peas accounted for 80 percent of Russian pulse production last year. The remaining 20 percent isn’t broken down by crop.
Chickpea production has grown faster than any other pulse crop in the last five years because of strong demand from the Middle East, according to analysts consulted by the USDA.
Russia exported 32 percent of its pulse production last year. The remainder was consumed domestically by the livestock sector or sold for human consumption.
Peas accounted for 77 percent of last year’s exports, followed by chickpeas at 21 percent and lentils at two percent.
Russia shipped almost no pulses for many years, but that started to change around 2009. Exports increased 10-fold to a high of 770,846 tonnes last year from 73,680 tonnes in 2008.
It is the result of a sharp increase in production. Russian farmers grew a lot of pulses before the demise of the Soviet Union, reaching a high of almost five million tonnes in 1990.
The Soviet Union collapsed the following year and so did pulse production, plummeting to a low of 880,000 tonnes by 1999.
Boersch said pulses and other crops were heavily subsidized under the old regime.
“When the Soviet Union crumbled, they took all of the subsidies away immediately,” she said.
“There was a major meltdown in those first 10 years.”
Production began to climb again in 2000, reaching a high of 2.47 million tonnes in 2011. It has fallen off the last two years.
Boersch is surprised by the rapid revival of Russia’s pulse industry, but she doesn’t expect it to return to the five million tonne level anytime soon because of stiff competition from crops such as wheat, barley, sunflowers and corn, which are cheaper to grow, better yielding or both.
India had been the biggest buyer of Russian pulses, but that changed this year when Turkey took over the top spot, accounting for 41 percent of pea exports, 65 percent of chickpea exports and 43 percent of lentil exports.
Shipments to Turkey are convenient. Transportation time is only a few days from Russia’s Black Sea ports.
Boersch thinks there could be a lot of pulse container business into Turkey in the future as exporters bypass some of the bottlenecks associated with bulk shipments.