Mexican bean output may influence prices

China also a factor | A poorer than expected crop in China may offset 
an excess of black and pinto beans from Mexico

Mexico and China will be the wild cards in this year’s dry bean market, says a major processor of the crop.

Markets have already absorbed the impact of the vastly reduced North American harvest.

Canadian farmers produced an estimated 203,100 tonnes of beans, down 26 percent from last year, while U.S. growers harvested 952,815 tonnes, down 27 percent from last year.

The Mexican harvest is underway and early expectations are for a big crop. The U.S. agricultural attaché is forecasting 1.14 million tonnes of production in 2013-14, up from 1.06 million the previous year and 626,000 in 2011-12.

“Favourable weather conditions with a regular rainy season since September encouraged growers to increase planted areas of dry beans in the main producing states,” said the attaché.

“Moreover, these favourable weather conditions have impacted favourably the expected yields.”

The report said Mexico won’t import product from non-North American Free Trade Agreement countries and is expected to boost exports.

Anthony Kulbacki, chief operating officer of Legumex Walker Inc.’s special crops division, said information on the Mexican harvest is only starting to arrive, so it’s premature to make concrete conclusions.

However, it looks like the Mexican surplus could put a damper on black and pinto bean prices.

“We will have some competition from Mexican exports that may have a negative impact on prices, and to some degree that’s being priced into the market now,” he said.

Kulbacki advised growers to keep a close eye on news from Mexico about the current harvest and the planting of the winter pinto crop, which will be harvested in February and March.

A poor crop in China, which has become a major exporter, could offset the excess Mexican production.

“From our understanding, the production or the yields weren’t as high as people hoped, so I think supply will be somewhat constrained there in the upcoming season,” said Kulbacki.

The company believes the quantity of Chinese beans available for export will be constrained in the second and third quarters of 2014, resulting in higher asking prices, which should in turn support North American bean markets.

“It’s hard to get any sort of read on what classes would have been most impacted by the weather,” he said.

Kulbacki is confident Legumex Walker will be able to buy enough product for its two Chinese plants.

As well, he said the company has a healthy sales program in white and coloured beans that should compensate for any reduced margins caused by declining pinto and black bean prices.

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