2018 a challenging year for Canadian pulse industry

It’s been a year of challenges for the Canadian pulse industry, while it struggled to survive after its largest customer became almost non-existent overnight. However, it has started to grow in new ways.

“It was challenging for farmers who saw a real shift in pulse prices, challenging for processors and farmers alike who saw the drop in export volumes. And I think this is the year that can be characterized as having one of the biggest changes in the pulse industry for the last 15 years,” said Gordon Bacon, chief executive officer of Pulse Canada.

The year started with uncertainty as India, Canada’s largest pulse customer, had just started to place import tariffs on pulse crops into the country. Prices continued to drop for Canadian pulses as buyers searched for new markets. As summer hit acreage fell and therefore so did production. In the Statistics Canada’s final report for the year, there were 3.581 million tonnes of peas produced, down from 4.112 million tonnes last year. Lentils dropped to 2.092 million tonnes from 2.559 million tonnes last year.

While exporters haven’t been able to find a big new market for lentils, they have been able to for peas. China has emerged as the destination for Canadian peas.

“By the time the final stats are in I think they’re going to far surpass (China’s) previous high, maybe even close to double that. And likely imports for peas in the calendar year, 2018, (will be more) than India ever has in the past,” said Carl Potts, executive director of the Saskatchewan Pulse Growers.

Despite the pulse tariffs, Bacon said there has still been a small amount of business done with India this year. There has been news as of late though that India may start importing pulses again due to production problems in the country.

“Export business to India may pick up because of (production) concerns, which we’ve always said. When they have a crop problem they’ll be back in the market, but for how much and what quantity? Well that’s hard to know for sure,” Bacon said.

While the Indian market for Canadian pulses may have shrunk, domestically in North America the pulse market has grown. According to Bacon, interest for plant based protein for human and animal consumption in North America has increased. The Canadian federal government even picked a plant protein supercluster, Protein Industries Canada, to received C$153 million in funding for development of the industry.

“The growth in the investment in the processing plants is telling you that the industry feels that is a long-term trend. You don’t spend hundreds of millions of dollars without being confident that this is a long term market demand that’s there,” Bacon said.

Moving forward Bacon thinks the Canadian pulse industry will need to start adjusting the varieties of pulses it grows in order to meet the end use demand. As an example, Bacon points to the barley industry where producers grow specific varieties of barley depending on whether it will be used for malt for beer production or for animal feed.

Overall, both Bacon and Potts both think North America is just at the start of these developments and there is a lot of room for growth in the domestic pulse industry still.

However, heading into 2019 they both expect to see another drop in pulse acres unless prices increase for farmers. Potts expects producers may shift lentil acres to peas, due to better pea prices.

“It’ll be interesting to see where pea prices end up as we get a little bit closer to planting time…but the overall pressure I think will continue to be there unless we have a market like India open up again,” Potts said.

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