Agriculture Canada expects plenty of leftover lentils in farmers’ bins at the end of the upcoming crop year.
The agency is forecasting 230,000 tonnes of carryout for 2010-11, which would be the largest ending stocks in five years.
“I’m just factoring in less demand from places like Turkey,” said market analyst Sergio Novelli.
“The exports will be down a bit and unfortunately this will be right when we’re bumping up production.”
Novelli said there is a direct correlation between carryout and prices, so he is predicting a 16 percent decline in average lentil prices for the upcoming crop year. The analyst is particularly concerned about what might happen to red lentil values.
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Farmers intend to plant a record 2.87 million acres of lentils, up 20 percent from what went in the ground last spring. Novelli expects 60 to 65 percent of those acres to be red lentils, up from 53 percent in 2009.
“If you were asking me which lentil (prices) will probably decrease the most I would probably have to say the reds,” he said.
Canada ships lentils to 120 countries but India, Turkey and Bangladesh account for half of the total export volume. Those three destinations buy red lentils and they are all looking at improved domestic crop prospects.
The situation in Turkey is particularly worrisome. Novelli is forecasting 550,000 tonnes of Turkish lentil production in 2010-11, up from drought-reduced crops of 280,000 tonnes last year and 100,000 tonnes the year before that.
Turkey was Canada’s largest lentil buyer in 2008-09 and ranks second behind India through the first seven months of the 2009-10 marketing campaign.
Novelli said Turkey will require Canadian lentils because one good crop doesn’t immediately compensate for two years of disappointing harvests.
Reliable reports out of India are hard to come by but Novelli said the crop in the ground has received good rains and should be “half decent.”
“We’re going to have a hell of a lot more reds produced in 2010-11 and less of a market to export them to.”
Canada’s lentil carryout could grow if the final seeded acreage number ends up larger than 2.87 million acres.
