Analysts are divided over reports of a record-smashing Indian kharif or summer pulse crop harvest.
The Indian government estimates farmers will harvest 8.7 million tonnes of pulses this fall, up 22 percent from the previous record.
That includes 4.3 million tonnes of pigeon peas, which is 35 percent higher than the previous record for that crop. Canadian green lentils are often used as a substitute for pigeon peas in India.
Expectations of a huge Indian kharif crop have dampened pulse prices. Pigeon pea prices have fallen more than two-thirds in six months.
G. Chandrashekhar, global agribusiness and commodity sector specialist, believes the Indian government estimate.
He said there was a 40 percent increase in kharif planted acres, well-distributed rainfall and good input management.
Chandrashekhar said in an email that the huge pigeon pea crop is “sure to affect” Canadian green lentil demand.
Other analysts are skeptical about India’s bin-busting crop.
Marlene Boersch, managing partner with Mercantile Consulting Venture, thinks the government numbers are inflated.
“The harvest estimate is on the ultra-optimistic side,” she said.
Rainfall during the monsoon season was 97 percent of normal, according to the India Meteorological Department. The rainy season started with a torrent and ended with a trickle.
Boersch has looked back at years with similar rainfall patterns and found that yields were nowhere near as high as the government is forecasting this year.
“We do have to keep in mind that they are very much a buying nation, and they use that information a little bit to their own service,” she said.
Boersch believes the pigeon pea acreage and yield estimates are exaggerated.
One telltale sign that there might be something wrong with the government’s numbers is that pea prices in India have already bottomed out and are heading back up.
This is happening at a time when India’s supposedly record crop is being harvested and pea imports are arriving from Canada, the Black Sea and other exporting regions.
“I’m actually astonished how quickly it has moved back up again,” said Boersch.
“I had anticipated pea prices firming up again, but I didn’t think it would happen until much closer to Christmas. I’m quite surprised, really, that we’re seeing it already in October.”
Greg Simpson, president of Simpson Seeds, a lentil processor in Moose Jaw, Sask., is another skeptic.
“I don’t think India is doing as good as we thought,” he said.
Simpson said pulse markets wouldn’t be heading back up if India’s kharif crop were as big as the government is portraying.
“The worst is behind us in terms of the bear market condition that was existing around harvest time,” he said.
Chandrashekhar is definitely still in the bear market camp.
He said 500,000 tonnes of the estimated two million tonnes in pulse contracts signed by Indian buyers have been cancelled because of falling prices for many pulses.
Another bear factor is the expectation for record acreage for the rabi winter crop, which is now going in the ground.
The good news is that rural incomes in India are rising due to improved farm output and prices, which will create additional pulse demand. He expects chickpea prices to drop 30 to 35 percent in the next two months, which will also stimulate demand.
He believes India will still import 3.5 to four million tonnes of pulses in 2016-17 despite the potential record kharif and rabi harvests.