India’s chickpea supply to fall short of expectations by millions of tonnes
India has released a new estimate for the damage caused by March hail and rain storms and it is a big number.
The government estimates 47 million acres of cropland was affected by the storms, which is double its previous estimate.
To put that number in perspective, growers in Saskatchewan are expected to seed about 36 million acres this spring.
Half of the damage occurred in the state of Uttar Pradesh, which is India’s top producer of lentils and peas and the fifth largest chickpea state.
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G. Chandrashekhar, associate editor of the Hindu Business Line, said most of the damage in Uttar Pradesh was to the wheat, rapeseed and mustard crops.
“There is damage to lentil and pea but not very heavy,” he said in an e-mail.
Chandrashekhar is forecasting 7.5 million tonnes of total Indian chickpea supply due to smaller-than-anticipated seeded acreage and rain damage.
That is well below the government’s production estimate of 8.28 million tonnes, a number that doesn’t include carryout, and it is a far cry from the government’s target of 9.3 million tonnes of production.
“The saving grace is the large import of yellow peas and other pulses, which will to some extent cushion the shock.”
Chandrashekhar noted that there is huge speculative interest in chickpeas, which often leads to exaggerated claims of damage and loss.
“The market has already factored in the loss and price has risen by 20 percent,” he said.
Marlene Boersch, managing partner with Mercantile Consulting Venture, believes India will need to import an extra 1.5 to two million tonnes of pulses than it usually does to make up for the shortfall in production.
“In terms of extra demand, that’s a lot,” she said.
There is also concern about India’s summer crop, which is currently being planted.
The India Meteorological Department is forecasting monsoon season rainfall will be 93 percent of the long-term average due to weak El Nino conditions prevailing over the Pacific Ocean.
Below average monsoon rains would reduce summer production and would likely result in fewer pulses going in the ground during the winter season, which is exactly what happened during winter 2014.
Boersch does not believe pulse markets have fully accounted for India’s shortfall and that bodes well for Canadian growers.
“What it tells me is that the balance sheets for next year are already very constructive in spite of acreage increases here,” she said.
Statistics Canada’s March seeding intentions report released on April 23 calls for 3.83 million acres of peas, up one percent from last year and 3.35 million acres of lentils, an eight percent increase.
Analysts believe increases for both crops will be much larger.
