Canadian farmers are set to harvest what appears to be a vastly improved lentil crop, says one of the world’s largest pulse processors.
“It is projected to finish well with a good-sized crop, good quality and some estimated yield gains helping to make up for some of the seeded acreage declines,” Murad Al-Katib, chief executive officer of Alliance Grain Traders told investment analysts during a conference call on the company’s second quarter results.
Christine Healy, an analyst with Scotia Capital, asked Al-Katib if yields will be well above the 1,050 to 1,230 pounds per acre forecasts by Stat Publishing and Agriculture Canada respectively.
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“I’m hearing reports that it’s closer to 1,400, so the yields are trending well above expectations,” she said.
Al-Katib said there have been “very ideal conditions” after a wet start and he noted that the average yields used by Agriculture Canada don’t properly account for today’s higher yielding varieties.
He said yield gains should help compensate for the lost acres in Canada and the United States.
There is a vast improvement in crop quality compared to last year. Saskatchewan Agriculture reports that three-quarters of the province’s lentil crop is in good to excellent shape compared to about one-quarter last year.
Alliance has seen some early harvest samples and the quality of the crop appears to be excellent.
Harvest is expected to be in full swing by mid-August with shipments of new crop beginning as early as the third week of the month.
“We’re right on time,” he said.
Healy said lentil exports in June were up over last June’s figures, which is the first time in 2011 there has been a year-over-year increase.
“Should we view this as a sign that lentil exports have finally turned a corner here?” she asked.
Al-Katib said demand has definitely picked up in recent weeks. Ramadan ends on Aug. 29 and buyers are already placing orders to refill stocks depleted by the extravagant feasts that happen when people break fast during Ramadan.
Those orders will be filled by old crop because Canadian new crop will not be available for late-August arrival in the Middle East and North Africa.
Demand is heating up as markets come to grips with pulse harvests in two critical production regions.
“Crops in India and Turkey are completed and are reported as simply below average in terms of quality and quantity,” said Al-Katib.
The Indian subcontinent hasn’t been buying its usual volumes of pulses.
But Al-Katib expects strong sales in the second half of the year.
He is hearing reports of 400,000 tonnes of lentil and chickpea production in Turkey, which is well below earlier estimates and the long-term average of 500,000 tonnes.
Sales to the Middle East and North Africa are strong as governments try to quell civil unrest by importing staple foods to keep inflation in check.
