Voracious Indian demand great for pulse prices

Analysts think Canada will have good market if drought breaks

CALGARY — India will import a lot more pulses in 2015-16 than many analysts are anticipating, says an Indian pulse trader.

Sanjay Jain, chief executive officer of Jawaharlal & Sons and Prakash Overseas, a pulse crop trading and milling company from Indore, India, expects a significant gap between supply and demand.

He believes India will need to import five to six million tonnes of pulses, up from 4.6 million tonnes in 2014-15, and about 3.5 million tonnes the previous few years.

That exceeds what other analysts expect. For instance, Stat Publishing sees 3.7 million tonnes of Indian imports in 2015-16.

Drought at seeding and rain during harvest shaved 25 percent off India’s 2014-15 production potential.

“The situation has threatened India’s pulse security in 2015-16,” Jain told delegates attending the Pulse & Special Crops conference.

But he noted India is a price-sensitive market. Pulse prices are already up 30 to 70 percent since Jan. 1.

“People will reduce their share of pulses in food if prices remain elevated,” Jain said.

He sees 600,000 to 700,000 tonnes of Canadian lentil imports in 2015-16 and a big yellow pea program as well.

Quinton Stewart, Viterra merchandising manager of pulses, thinks Canada’s red lentil acres are up 25 percent over 2014, green lentil and yellow pea plantings increased five to 10 percent and green pea acres are flat.

Seeding was timely and subsoil moisture was adequate, but frost and dry conditions have slashed yields and acres.

“As it sits today, we’re on (track) for an average crop,” he said.

That could change if the heat and dry conditions persist, although he is not yet willing to declare a full-fledged drought.

Stewart is forecasting 1.55 million tonnes of red lentil production, which is below Stat Publishing’s estimate of 1.77 million tonnes. He believes the worst-case scenario is 1.15 million tonnes based on an average yield of 15 bushels per acre.

Lentil prices could spike if the worst-case scenario unfolds, especially if Turkey is in the market for its usual 350,000 tonnes of product.

But that won’t be the case, said Tube Memis, general manager of Mamisoglu Group-Tat, one of Turkey’s largest pulse and rice manufacturers and exporters.

She sees 390,000 tonnes of Turkish lentil production, up 100,000 tonnes from last year. Acreage is down 30 percent, but yields are expected to be more than double last year’s.

Turkey imported 300,000 tonnes of Canadian lentils in 2014.

“It was too high last year,” she said.

She anticipates a big drop in demand, considering the carryover of Canadian imports and the increase in Turkish production.

“I guess we will import 150,000 or 200,000 tonnes this year from Canada,” she said.

Turkey’s lentils are dark red and are small and round. Memis said they are preferred over Canadian lentils in markets such as Bangladesh, Sudan and the European Union.

Stewart said every Turkish processor has a different production number. He doubts Turkey’s import program will fall as low as 150,000 tonnes.

He sees 3.3 million tonnes of Canadian yellow pea production, topping Stat Publishing’s estimate of 2.69 million tonnes. He believes there will be enough peas and lentils to meet India’s needs.

“We can service it, but it’s not going to be at a cheap price,” said Stewart.

He expects strong pea demand out of China, despite the fact that plenty of stocks are sitting in containers or silos in that country.

Stewart is forecasting a 700,000 tonne pea export program to China, but green pea demand from the Chinese could be spotty.

Gildardo Silva, general manager of Natural Specialty Crops, said the U.S. pulse crop is coming along nicely.

Growers planted 35 percent more lentils than last year with the majority being medium green lentils.

“Most of the production areas do need moisture, although the situation is not as dry and desperate as Canada,” he said.

He believes there is still potential for an average crop. Harvest will begin in mid-August.

The U.S. chickpea crop may be up to 10 percent smaller than in 2014.

“The crop is well established and most of the fields are already in bloom,” said Silva.

He believes it has the potential to be at least an average crop. Demand will be good because of lower yields in Mexico and a dismal Indian harvest.

Pea acres could be up as much as eight percent. The U.S. grows mainly green peas, although yellow peas are becoming popular in North Dakota.

Silva said green pea pipelines are already clogged, so average yields could produce a bearish outlook

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