Two of Canada’s top pulse customers have production problems.
Excess rain has damaged India’s pulse crops while drought is ravaging Turkey’s red lentil crop.
Reports surfaced last week that rain and hail had damaged crops in Madhya Pradesh, Rajasthan and Maharashtra, the three Indian states that are responsible for about half of the country’s annual pulse production.
Chuck Penner, an analyst with LeftField Commodity Research, thinks the hail was probably too isolated to cause extensive damage, but the rain is another story.
Read Also
Sask. ag group wants strychnine back
The Agricultural Producers Association of Saskatchewan has written to the federal government asking for emergency use of strychnine to control gophers
“In India, even regular crop reports are hard to get so I tend to watch the price action more than what the government says or even what the media says,” he said. “We’ve seen prices for almost all pulses jump in India.”
The price hike came immediately after the Indian government released its latest advance estimate calling for record pulse production, which would usually have the opposite impact on prices.
“That tells you something, that traders are really expecting that there was some damage,” said Penner.
He had been getting anxious about a massive Indian crop reducing demand for Canadian peas and lentils.
“Now I’m not so nervous anymore,” said Penner.
Stat Publishing analyst Brian Clancey said it would be nice to think the damage to India’s chickpea crop would boost demand and prices for Canadian yellow peas, but the reality is that Canada won’t be able to respond because of the ongoing transportation quagmire.
“Unless you have the capacity to respond to (increased demand), it becomes irrelevant,” he said.
Clancey recently spoke to a pulse crop buyer who said the earliest delivery he can get out of Canada is for the June-July time frame, and that was for product in containers.
There are also lentil production problems in Turkey.
A U.S. Department of Agriculture report on Jan. 30 said much of Turkey was experiencing drought. Conditions haven’t improved much since that time, according to rainfall maps produced by the USDA’s Foreign Agricultural Service.
Most of the country had 50 to 75 percent of normal rainfall between Sept. 1 and March 10.
It is even worse in the red lentil growing region along the border with Syria. Rainfall has been less than half of normal in much of that area.
“Red lentil prices in Turkey have been on fire for probably a couple of months now, so it’s not strictly a new crop issue. I think they were already running low on supplies and this will just make it worse if they don’t get some rain in a hurry,” said Penner.
Canadian red lentil prices are just starting to respond to the problems in Turkey and India. There are some 22 cents per pound bids on the market.
“It’s starting to perk up, and I think if we don’t see a turnaround in India or in Turkey we’ll see more strength as the year goes on,” said Penner.
Canadian exporters shipped a record amount of lentils during the first half of 2013-14, which is a sign that containerized shipments have been strong compared to bulk ex-ports.
Penner said growers have been eager to sell the crop because it is one of the few commodities moving. That has kept a lid on prices up until now.
