Large crop may see dropin lentil exports to Turkey

Canadian markets could be squeezed further by Australia’s lentil crop, with harvest forecasts up to triple the previous two years

Turkey is poised to harvest its biggest lentil crop in a decade, which will reduce demand from Canada’s second biggest customer, according to a large importer and processor of the crop.

Turkey bought $381 million of Canadian lentils in 2016, which ranks behind only India’s $523 million in imports. So it is an important market for Canadian farmers.

Merve Fettahoglu, export manager for Goze Agricultural Products and Marketing Inc., Turkey’s second biggest importer of Canadian lentils, said the Turkish crop is off to a good start this year.

Farmers planted nearly 700,000 acres in the fall, a 10 percent increase over last year.

It has been dry in Turkey. Rainfall in southeast Anatolia, where most of the red lentils are grown, was 35 percent below normal for the period stretching from October 2016 to February 2017.

But the rains that did come were perfectly timed.

“Sufficient rain has come right on time, hence we expect an increase in yield,” Fettahoglu said in an email.

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Harvest is expected to start in mid-May. She forecasts 500,000 tonnes of red lentils and 35,000 tonnes of greens, which would be the biggest crop since 2007 and 39 percent larger than the previous five-year average.

“Because of good yield expectations and increase in acreage, we will focus on Turkish lentils primarily and the prices will be competitive,” said Fettahoglu.

“This is the reason why when Turkey starts to import, price will play (a more) important role than before.”

Chuck Penner, analyst with LeftField Commodity Research, agrees with Fettahoglu that Turkey’s red lentil crop received timely rains in December and March. It was dry in January and February but the crop is dormant at that time and doesn’t use much water.

But he wonders about her forecast for a crop that is 47 percent larger than last year’s harvest of 345,000 tonnes of reds and 20,000 tonnes of greens.

“That would be exceptional, especially if acreage is only up 10 percent,” said Penner.

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Still, it is yet another bearish report in a market that is awash in them.

The biggest bear factor is that India recently harvested a record rabi (winter) crop of pulses.

Another is that private forecasters say Australia’s lentil crop is much bigger than the government estimate of 620,000 tonnes. They believe it is more like 750,000 to 800,000 tonnes or triple the size of the previous two years.

Red lentil prices are less than half of what they were at the beginning of 2016 but they are staying firm at around 23 to 25 cents per pound and new crop prices are only one to two cents below that.

That tells Penner that exporters are still putting sales on the books despite all the seemingly bearish factors.

“There is still some solid interest out there,” he said. “Lentil prices just aren’t softening to any real degree. I don’t know what it’s going to take to push this market lower.”

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