Canada is embroiled in a quality dispute with its second largest lentil buyer.
Algeria has stopped accepting containers of large green lentils from Canada due to excessive seed coat wrinkling.
Wrinkling is not a grading factor in Canada but it is considered a minor damage issue in Algeria. The country allows a maximum seven percent minor damage, such as wrinkling or staining, on imported lentil seed.
Buyers are reporting minor damage levels as high as 18 percent in shipments from Canada this year, forcing at least one Algerian steamship company to place an embargo on Canadian containers.
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Pulse Canada chair Gord Bacon said exporters are working with buyers to have the product cleaned in Algeria to acceptable levels. Containers that were backlogged in Italy, which acts as a staging area for product en route to Algeria, have been routed elsewhere.
He estimated that earlier this year 8,000-10,000 tonnes of green lentils were tied up in the trade impasse.
“It’s fair to say at one point we were probably looking at $4-$5 million of lentils that were being affected by this problem, which is related to a difference in how quality is assessed.”
That estimate doesn’t take into account future sales that might be scuttled by the issue.
Colombia is the leading buyer of Canadian lentils but Algeria is a close second, consistently buying about 45,000 tonnes of low quality greens. Annual sales to the North African country have averaged $23 million over the past five years.
Two unusual factors gave rise to the dispute with Algeria.
An Aug. 20 frost that hit most of Canada’s lentil growing region caused excessive wrinkling in the 2004 crop, with some domestic processors reporting levels as high as 20 percent in samples of No. 1 product.
Almost simultaneously, Algeria resurrected grading standards that hadn’t been enforced for years, catching many exporters by surprise.
That convergence of events led to a huge problem in the 2004-05 marketing year, but western Canadian processors and exporters say damage related to wrinkled and stained product has become a perennial customer complaint.
“It’s a broader issue that we need to address as an industry,” said Murad Al-Katib, president of Saskcan Pulse Trading Inc., Canada’s largest red lentil processor.
Wrinkled seed causes headaches for red lentil splitting facilities. In green lentils, which are usually packaged whole, it creates an undesirable appearance.
“There is a prevalent view that we have to ensure that our grading standards match the needs of the clients that we’re servicing in the world,” said Al-Katib.
To that end, the Western Canadian Marketers and Processors Association is pushing for changes to the Canadian Grain Commission’s lentil standards through the pulse subcommittee of the western standards committee.
“I’m confident there will be some meaningful transition in the way we’re doing our grading within the next 12 months,” said Al-Katib.
He recognizes that adding another downgrading factor will be “a delicate balance” because it could penalize prairie lentil growers. But the status quo is unacceptable.
“It’s definitely a problem that needs to be addressed.”
Bacon intends to get a read on how other exporters and importers deal with wrinkling and staining when he attends the International Pulse Trade and Industry Confederation convention in Cairo, Egypt, in June.
Algeria’s grading standards are based on the United Nations Food and Agriculture Organization’s Codex Alimentarius standards, which Canada might want to consider adopting.
But Bacon is promoting a more cautious approach than Al-Katib. He doesn’t want to see the industry make rash decisions based on a customer complaint stemming from an unusual production year.
