Rising ocean freight rates are making Canadian pulses less competitive in the Indian subcontinent and the Middle East, two of the world’s key importing regions.
“We are a little bit on the losing end vis-ˆ-vis Australia who happens to have a very, very good crop this year,” said pulse industry analyst Marlene Boersch.
High freight rates favour countries that are closer to the importing markets and in this case that is Australia. It doesn’t help that the land down under had a spectacular crop year.
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According to the Australian Bureau of Agricultural and Resource Economics, the country’s winter grain crop is forecast to yield nearly 37.6 million tonnes in 2003-04.
That is 20.6 million tonnes more than last year’s drought-reduced crop and second only to the 39.3 million tonne harvest of 2001-02. Pulse production is expected to rise 81 percent over last year’s levels to 2.1 million tonnes.
Boersch said high freight rates helped push pulse prices below the level that many Canadian farmers wanted to sell at this fall. They held out for better returns.
Playing the waiting game would have been a good grower strategy if Australia hadn’t come through with a near-record harvest. In hindsight, it was a gamble that didn’t pay off.
“We should have been more aggressive sellers on the farm level in the fall.”
Boersch said farmers should have set trigger prices and sold more crop shortly after harvest for a decent, yet unremarkable, return.
“It’s very hard to pick the top of the markets and our farmers seem to be a little bit into that.”
But all is not lost. While Australia is already making inroads into Asian and Middle Eastern pulse markets at Canada’s expense, Canada should have a leg up in northern Europe and South America where it is closer to the destination, said Boersch.
