Kabuli chickpea prices have rapidly escalated in the wake of Russia’s invasion of Ukraine.
Colin Young, owner of Mid-West Grain Ltd., a chickpea processor near Moose Jaw, Sask., said Russia had been keeping kabuli prices in check early in the 2021-22 campaign.
“When we were offering chickpeas at $1,300 per tonne, Russia was in there at $820,” he said.
End users were content buying lower-quality, small calibre kabulis from Russia because the price was closer to what they were used to paying.
They scaled back their buying programs and bought only what they needed, so there was little business done out of Western Canada in the first half of the marketing year.
Read Also
USDA’s August corn yield estimates are bearish
The yield estimates for wheat and soybeans were neutral to bullish, but these were largely a sideshow when compared with corn.
But Russia quit the market with the outbreak of war and that is making buyers anxious.
Canadian bids that had dropped to 37 cents per pound have rebounded to 48 cents as end users scramble to cover their needs.
“Their ace up their sleeve was taken away,” said Young.
“All of the sudden it was, ‘uh-oh, we don’t have our cheap option anymore.’”
Jeff Van Pevenage, president of Columbia Grain, said trade flows that usually go through the Black Sea into Turkey for processing have been shut down.
In the meantime, Turkey announced a temporary export ban on a variety of agricultural products including chickpeas, which is further constricting global supplies.
Turkey has become a buyer of North American chickpeas after being out of the market for a couple years.
“We’re getting inquiries every day. That tells me that the flow has certainly changed,” said Van Pevenage.
U.S. nine-millimetre kabuli chickpeas are suddenly selling for US$1,375 per tonne after trading at around $1,100 per tonne for the past eight months.
A Mexican exporter recently sold 12-mm chickpeas to Europe for $1,600 per tonne.
And the supply situation appears to be getting worse. Farmers in the United States intend to plant 241,500 acres of large kabuli chickpeas, a 22 percent drop from the previous year.
“What we are seeing is a lot of farmers going to canola and dropping out of pulses,” he said.
Young has a hunch that there will be a similar drop in Canada because crop insurance coverage for chickpeas can’t compete with other crops and there appears to be a strong chance of another dry growing season.
“We’ve got really good prices on canola and durum with better coverage,” he said.
Young anticipates 100,000 to 150,000 tonnes of carryout from the 2021-22 crop and sub-100,000 tonnes of new crop production, so Canadian supply will be far from burdensome.
He also anticipates smaller crops in places like Turkey, Russia and Argentina because farmers in those countries need cash and there are easier crops to turn into hard currency.
There is a good chance that kabuli prices will stay firm in the new crop year and may even rise a little from today’s levels, he said.
However, he doesn’t see much happening between now and the end of July. Pakistan filled up a boat about three weeks ago and is likely out of the market until new crop arrives.
Europe has slowly been replacing Russian supplies.
Turkey is the last major market to be covering its needs.
“I think the market is sideways from here until July,” said Young.
