Fababean growers should not expect to sell much of their crop into export markets this year, say analysts.
Egypt is by far the largest importer of the crop. Buyers in that country are having a difficult time getting letters of credit due to Egypt’s economic woes, said Marlene Boersch, managing partner with Mercantile Consulting Venture.
Canada also faces stiff competition on the supply side.
“There’s lots of competition from Europe and certainly from Australia,” she said.
Australian farmers produced about 500,000 tonnes of fababeans this year compared to about 300,000 tonnes in each of the previous two years.
Stat Publishing expects Australia to export 370,000 tonnes of fababeans this year, up from 266,000 tonnes the previous year and 289,100 tonnes the year before that.
Canadian growers planted an estimated 70,000 acres of the crop, down from 125,000 acres the previous year.
Boersch said many growers backed away due to the difficulties of marketing fababeans.
Growers exported 25,097 tonnes out of the 162,300 tonnes of total supply last year. By contrast, 82,420 tonnes were sold into Canada’s feed market, according to Stat.
Boersch expects a smaller export program in 2016-17 due to Egypt’s financial problems and Australia’s huge crop.
That means a lot of fababeans will have to work their way into the feed market but that will be tough due to the abundance of feed quality grains this year.
“I would suspect that the feed market will be down this year,” she said.
Stat is forecasting that Canadian farmers produced 92,100 tonnes of fababeans, down from 139,300 tonnes last year.
Chuck Penner, analyst with LeftField Commodity Research, believes it will be closer to 140,000 tonnes due to exceptional yields.
In the latest issue of Saskatchewan Pulse Growers’ Pulse Market Report, he said it has become difficult to find buyers for this year’s crop.
“That situation isn’t likely to change for the rest of 2016-17 as the export market has become overcrowded,” said Penner.
That means growers will have to rely on the feed market.
“This will keep prices in line with values for other feed sources, especially feed peas,” he said.
“It could also make marketing of tannin varieties more of a challenge.”
Canada produces both tannin and non-tannin varieties. The tannin varieties are not well-suited to feed markets because animals find them unpalatable.
Boersch is concerned about the long-term viability of Canada’s newest pulse crop.
“We were hoping it would be another leg to stand on,” she said.
She believes it will be difficult to grow the export side of the business.
“I think we’ll really have a tough time expanding a lot, partly because Egypt and the Middle East are in a mess but also because we’re competing with very high yields in Europe,” said Boersch.
“From a purely competitive point of view, it could be a hard slog.”
Carl Potts, executive director of Saskatchewan Pulse Growers, agreed the export market is shaky now due to the political and economic instability in the Middle East.
But he feels Canadian fababeans can be competitive and are a good agronomic fit in rotations.
“We have had an improvement in the varieties that we’ve been producing here in Saskatchewan,” he said.
Fababeans do better than peas and lentils in wet conditions, so they are suited for the northern and eastern parts of the province.
Potts said there could be 200,000 to 400,000 acres of fababeans grown in Western Canada at some point. One potential new market for smaller-seeded fababeans is the processing market, where they will be turned into flour and other fractionation products.
“They are higher in protein than peas, so we see the potential at least for fababeans to be used for fractionation,” he said.