Sean Pratt reports from the Global Pulse Convention in Cesme, Turkey, about what is driving pulse markets.
CESME, Turkey — Canada is sold out of green lentils, and the forecast is for another tight year in 2016-17.
“Farm bins are empty. Warehouses and pipelines are empty,” said Gerald Donkersgoed, vice-president of Ilta Grain.
“We have cleaned out the crop and I would suggest we didn’t grow enough green lentils last year.”
Stat Publishing believes Canadian growers planted 1.44 million acres of green lentils this spring, a 37 percent increase over last year.
Donkersgoed said the crop is in fantastic shape, but he worries that it could be a wet summer, which would boost yields but possibly lead to disease and quality problems at harvest.
“The one thing that keeps me awake at night is just how we’re going to finish off the rest of this growing season,” he said.
Stat is forecasting 655,000 tonnes of large green lentil production in Canada based on the previous five-year average yield of 1,367 pounds per acre, which would result in 88,000 tonnes of carryout.
Donkersgoed believes it will be smaller than that because the average included 2013, which was an outlier year with near perfect yields of 1,692 pounds per acre.
“If you take that (year) out, all of the sudden you drop out 50,000 tonnes of stocks,” he said.
“Again, we’re going to be tight.”
There is tremendous opening demand for new crop green lentils because buyers are clamouring to restock their empty pipelines.
“I’ve joked with buyers that I’ve sold the first shipment 42 times already,” said Donkersgoed.
“We’re going to be coming out of the gate pretty hard.”
Farmers in the United States planted an estimated 850,000 acres of lentils, up 72 percent from last year. Three-quarters of those acres are green lentils.
Stat is forecasting 450,200 tonnes of total lentil production in the U.S., but Tim McGreevy, chief executive officer of the USA Dry Pea and Lentil Council, said it would take perfect conditions to achieve that level of production.
He doesn’t believe that will be the case because there are a lot of brand new lentil growers this year.
“There will be some wrecks because lentils are not easy to grow,” he said.
McGreevy is forecasting 350,000 to 400,000 tonnes of total lentil production, three-quarters of which will be green lentils.
Iran could once again be a big buyer of Canadian green lentils now that the economic sanctions have been lifted.
Athlete Ansari, director of Emco International, a broker operating in the United Arab Emirates, estimates that Iran imported 150,000 tonnes of green lentils last year, up from about 45,000 tonnes the previous year.
“I think going forward it is going to be a major destination,” he said.
McGreevy asked members of the green lentil market outlook panel for their price forecast.
Nico Georgeoglou, managing director of Elamer S.A., one of Greece’s largest importers of agricultural products, believes the big North American crop will affect markets.
“I think we’ll have a price reduction,” he said.
Harsha Kukreja Rai, vice-president of international sales with Mayur Global Corp., an Indian pulse processing company, said she thinks a good volume of business will take place in the US$750 to $800 per tonne range.
Donkersgoed teased her about that lowball estimate.
“You’re talking about red lentils right?” he said.
Donkersgoed believes prices will stay firm for the first few months after harvest because of strong opening demand as buyers restock and then there will be a “slow erosion” in prices starting in November or December.