Little impact from spike in Black Sea pea output

The 30 percent increase in production over 2016 will be offset 
by a decline in North American supply, says analyst

There will likely be a dramatic surge in Black Sea pea production this year, but it should not affect Canadian prices that much, says an analyst.

APK Inform, a Ukrainian agribusiness consulting firm, is forecasting Ukrainian farmers will plant 926,250 acres of peas, a 57 percent increase over 2016.

It is projecting 973,000 tonnes of production, a 30 percent bump over the previous year.

That will mean more exports from a country where shipments already saw a huge increase this crop year.

APK estimates 500,000 tonnes of pea exports in 2016-17, a 114 percent increase over the previous year.

Chuck Penner, analyst with LeftField Commodity Research, says most of Ukraine’s peas find their way to India and other countries in South Asia.

He believes the report of the huge jump in Ukraine’s pea acres is quite plausible, given the recent trend in that country.

“They’re really focusing more on the export market and exportable crops,” said Penner.

He has heard anecdotal reports that acres and production will also be up in Russia. The country harvested 2.2 million tonnes of the crop last year, making it the world’s second largest producer behind Canada.

However, Penner isn’t overly concerned about the growth in Black Sea pea exports in 2017-18 because North America is expected to have a smaller crop.

He is forecasting four million tonnes of Canadian production. That is down from the official estimate of 4.8 million tonnes last year, which Penner believes should actually be five million tonnes.

So that would be a 20 percent decline in Canadian production, mostly green peas.

The U.S. Department of Agriculture is forecasting 1.14 million acres of peas in that country, a 17 percent drop from the previous year.

The decline in North American production will more than offset the increase in Black Sea peas.

“We’re going to have a nice, well-supported price assuming average yields,” said Penner.

However, there is reason to be concerned about the long-term potential for the Black Sea region to increase its share of a market that has been dominated by Canada.

“It’s something to keep watching, for sure,” he said.

Growers in Ukraine and Russia are responding to attractive pulse prices and are keen to diversify their crop mix. However, they are also expanding their corn and soybean acres.

“Peas will have to compete for acres there,” said Penner.

“It won’t just grow unhindered.”

Another mitigating factor is the continued growth in pulse consumption in India.

“The Indian market is growing all the time. It’s still expanding, so there’s room for everybody in there,” said Penner.

Russia and Ukraine are not big lentil growers, but Kazakhstan is becoming one. The country’s first vice-minister of agriculture is forecasting 500,000 acres of lentils this year, which would make Kazakhstan the fifth largest producer and fourth largest exporter of the crop.

In a recent story on the BNews.KZ website, the vice-minister said exporting lentils is profitable and that Kazakhstan has a logistical advantage over Canada in shipping lentils to India and Pakistan.

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