Indian farmers will harvest 13.67 million tonnes of pulses in 2004-05, down 10 percent from last year’s total, according to a report from that country’s ministry of agriculture.
While that falls 1.6 million tonnes short of what the government had targeted for pulse production, it presents Canada with little market opportunity, say analysts.
First, the 13.67 million tonne crop is still 360,000 tonnes above the 10-year production average. Second, it comes on the heels of a record 15.23 million tonne harvest in 2003-04.
Also, while Canadian farmers have seen low green and yellow pea prices, the soaring ocean freight rates and the stronger Canadian dollar have made the landed price of the seed higher in importing countries, limiting the sales potential to India.
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“The gap between the farmgate price and the landed price in India is as wide as it ever has been,” said Greg Kostal, an independent Winnipeg-based pulse crop analyst.
That is not to say Canadian peas are exorbitantly costly in India. In fact Kostal described it as a middle-of-the-road price. But it is not as cheap as many Canadian growers would think by looking at their elevator receipts.
When it comes to India, price is everything. Domestic production numbers are largely meaningless, said Kostal.
Indian buyers have consistently confounded traders by importing lots of product in good production years and little in times of drought, depending on international commodity prices.
“People will question how accurate those (2004-05 production) numbers are, but it doesn’t really matter because actions speak louder than words,” he said.
The totals break down to 5.04 million tonnes of kharif or summer season production and 8.63 million tonnes of rabi or winter season production.
The rabi number is an estimate because the crop won’t be harvested until March. It is the crop Canadian growers should focus on because it contains an estimated 5.78 million tonnes of chickpeas and 2.85 million tonnes of peas, lentils and other pulses. The kharif crop, on the other hand, is largely comprised of pulses that Canadian farmers don’t grow.
There is still a chance of a rabi crop problem put Kostal said that is unlikely because it is too far along in its development.
He expects India will be in the market for about 750,000 tonnes of peas this year judging by early trade volumes. That is a little higher than usual.
Canada shipped 295,000 tonnes of product in the first four months of this crop year compared to 140,000 tonnes in 2003-04.
Volumes have slowed since then but Kostal expects India to easily match its usual Canadian imports of about 350,000 tonnes.
Unfortunately that won’t be enough to ease the pressure on domestic pea prices.
Statistics Canada reports Canadian pea stocks were a record 2.1 million tonnes at the end of December, up from 1.3 million tonnes in 2003. Almost all of that supply is stored on farms. Only 120,000 tonnes is in the hands of processors and elevator companies.
Stat Publishing analyst Brian Clancey said it bolsters trade expectations that the crop year will end with a record 750,000 tonnes of old-crop peas on hand.
That means there is no quick fix for pea prices unless there is a crop wreck in the coming growing season.
“It just takes time to muddle through the supply and month by month you work at it,” said Kostal.
