Canada has lost its long-standing status as the world’s biggest pea producer.
Russia harvested a record 4.3 million tonnes of the crop in 2022, according to a recent Global Pulse Confederation (GPC) article. That tops Canada’s estimated production of 3.59 million tonnes.
Marlene Boersch, managing partner of Mercantile Consulting Venture, said the report of a record Russian pea crop makes sense given that wheat yields in that country were unprecedented.
She believes Russia likely produced more peas than Canada last year as well due to Canada’s drought.
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“Our salvation so far has been that they use a lot of it domestically for feed,” said Boersch.
But Russia’s exports have been rising, according to Rustam Guliev, a commodity trader with Top Grain, a Russian grain exporting firm. He told GPC the country shipped 1.4 million tonnes of peas in 2021-22, a 65 percent increase over the previous year.
Canada is still the global leader on that front, exporting 1.9 million tonnes last year, which was a down year for sales due to the drought.
Guliev told GPC that peas are becoming more popular with Russian farmers due to their ability to fix nitrogen, resulting in lower fertilizer costs.
They are also harvested earlier than cereal crops, allowing Russian farmers to get a jump on generating revenue.
Russia’s exports have been strong to start 2022-23, with 350,000 tonnes out the door since July. That is despite considerable challenges caused by international sanctions.
“Most container lines left Russia or severely limited their presence due to the imposed sanctions,” said Guliev.
Container freight costs are 50 to 60 percent higher than last year.
Russian exporters are having a hard time collecting payment because most Russian banks are under sanctions and some ports refuse to accept Russian peas, he said.
Boersch doubts that many Russian peas are moving by bulk vessel these days because there is fierce competition from wheat, corn and barley.
“I would be surprised if they find space for peas,” she said.
That means peas are likely moving by rail or container to markets in South Asia and they could soon be heading to another important market.
“I have been told there is a fairly silent phyto(sanitary) agreement between China and Russia,” said Boersch.
Guliev confirmed that rumour. He said the two countries have agreed to a protocol for shipping Russian peas to China, and that agreement should be signed in the coming months.
“For us this is a very promising market and I believe that we could compete with Canada and other major suppliers of peas to China,” he said.
Boersch said the agreement poses a threat to Canada in its top pea market.
“We still have the best transportation route there, but I don’t think we will be staying at 96 to 98 percent market share,” she said.
Boersch doesn’t know how the logistics would work for Russia. Would peas be transported by rail? If so, they would likely be used for the feed market because fractionation plants are on the opposite side of China.
While China is a concern, she still thinks Russia poses a bigger threat to Canada in other markets including Bangladesh, Pakistan and India.
