Winnipeg, May 9 – Lentil prices are largely stagnant, one market participant says, as key buyer India sits on the sidelines.
And from the outside, stocks appear ample, but new-crop production could shift the dynamic of Canada’s lentil market.
Statistics Canada stocks data as of March 31 pegged lentil supplies at about 1.1 million tonnes, which compares with about 500,000 in the same time frame the year prior.
“Once you start throwing the red lentils in with the green lentils, it really distorts the picture,” said David Newman of Commodius Trading Inc.
“We need the new-crop, so if there are any issues there, it’s going to be a big deal,” he said.
“It’s not like we’re sitting on a year’s worth of stocks. I just don’t see a lot more downside.”
Both red and green lentils have sold out in previous years, so current supplies are not as burdensome as they appear.
But the market is holding mostly steady, due to a lack of participation from India.
A fumigation dispute with the country hasn’t been fully resolved yet — though India has offered an extension on a policy which would put fumigation onus at the point of origin.
Additionally, India has the ability to hold out on buying, due to its own good domestic crop and ample supplies.
And at the same time, growers in Canada aren’t looking to sell, which means the market isn’t really trading anything, Newman said.
“So we’re kind of stuck in that holding pattern.”
This year’s seeding is likely to bring yet another season of variability.
“I think you’re going to see a wide range, a lot of staged planting [this season],” Newman said.
“I think you’re going to see a range of harvest, a range of conditions again, but none of it matters unless India is participating.”