Poor prices discourage Indian pulse seeding

If India’s pulse crop is smaller it could create export opportunities for Canadian growers

REGINA — A market opportunity may be brewing for Canadian pulse producers as Indian pulse acreage might contract considerably be-cause of poor returns in that country. 


“Right now, with the prices that are available to growers in India, it’s not attractive to grow pulses. We’re seeing them go into things like cotton and corn,” Chad Molesky of Viterra told a meeting at Canada’s Farm Progress Show in Regina last month. 


If Indian prices stay low, it would also lead to reduced pulse seeding in the winter crop that is sown in the fall.


He said Indian lentil area could be down 25 to 50 percent.


It’s unlikely the summer pulse crop will be as large as last year’s record 9.12 million tonnes, and even the Indian agriculture ministry’s production target of 8.75 million tonnes may not be achieved. 


Pulse planting in India got of to a slow start in June but in the last week caught up. As of June 30, 4.65 million acres of summer pulses had been sown, up from 3.22 million last year at the same point and the historical average of 2.53 million. The long-term average total summer pulse acreage is 26.09 million.


Indian farmers continue planting for another few weeks. The final planted acreage report will be available by the end of July.


India already imports more Canadian pulses than any other country, but it might have to import more if there is a small domestic crop.


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Indian importers have forward bought less supply compared to this time last year, which may provide an upside to the market if Indian production falls. 


However, Molesky said he doesn’t see a significant rally in red lentils soon.


Red lentil ending stocks in Canada are low because India aggressively imported supply as deadlines for a fumigation agreement between Canada and India approached. 


However, India, Pakistan, and Turkey still sit on large stockpiles of lentils. 


“There is not really a lot of incentive for these guys to pay up and get a new position on new crop,” Molesky said.


Last week, India extended its waiver on pulse fumigation until Dec. 31, providing better certainty for the market, which had been tentative while the issue was still unresolved.


Global red lentil supply was bolstered by Australia’s large harvest. Canadian farmers have reduced lentil seeded area but if yields return to average, this country would have about the same production as last year. 


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“It’s not a tight S and D (supply and demand), so we would expect values to trend a little bit lower, into the low 20 cent range,” Molesky said.


“But long term I think you will see things grind back towards a mid 20s bid.”


Green lentil price prospects are better because of dry weather in the United States and the expectation that Indian pigeon pea acres will drop and reduce their over supply.


“So we expect prices to remain relatively steady and increase more toward the end of this year,” he said.


“I don’t believe that we are going to see 50 and 60 cent green lentil prices for lairds this next year, but 35 to 40 is a reasonably good range there.”


Green peas will likely trend sideways even though there was a 15 to 20 percent drop in Canadian acreage this year. A large carryover remains, almost 50 percent of a regular crop, so acreage didn’t drop enough to create a bullish market. 


“I would expect a bid of $8 (per bushel for green peas) would be on the low side, and when the market needs to come in and replenish the cupboards, as they say, $9 and $9.50 a bu. bid is realistic,” Molesky said.


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