Canada’s pea trade with India started slow in 2009-10 but finished with a flurry due in part to Europe’s feed grain shortage.
During the final May through July quarter of the crop year, exporters shipped 532,000 tonnes of the crop through Vancouver and Thunder Bay, most going to India. That’s up from the record of just under 400,000 tonnes in the same period last year.
The 2010-11 campaign also got off to a good start. It is already the second best August on record, with 167,550 tonnes booked on vessels.
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“It’s a really good summer for pea movement,” said Brian Clancey, publisher of theStat Publishing newsletter.
The 2009-10 campaign started out poorly. Pea shipments to India in the first nine months were 30 percent lower than a year earlier.
India had a big winter or Rabi pulse crop and took a while to consume those supplies.
Canada wasn’t the only pulse exporter affected. Shipments from Myanmar, which ranks behind Canada as the second biggest supplier of pulses to India, were down 49 percent during the first half of 2010.
But recently, India’s state trading companies filled large government tenders for yellow peas.
The sudden buying spree allowed Canada to close the 2009-10 crop year with 1.63 million tonnes of pea exports, only 13 percent below last year’s record of 1.87 million tonnes and the second best year on record.
One reason pea sales are up is that lentil sales have been slumping in recent months.
In announcing its disappointing second quarter financial results, Alliance Grain Traders Inc., one of Canada’s largest pulse processors, said it was forced to switch from handling high value lentils to low margin peas because lentil buyers simply weren’t in the market and growers weren’t willing to sell.
“You turn to what you can get and peas were readily available so we turned to peas,” said Alliance president Murad Al-Katib.
Clancey thinks sales have also picked up in part due to drought in the former Soviet Union reducing its ability to supply peas. More importantly, it has created a feed grain shortage that is pulling in peas from France, a country that planted 60 percent more yellow peas than it did last year due to lucrative new government subsidies.
“You have this market boiling away there that will suck in those peas at fairly high prices. That will create room for us,” said Clancey.
European feed pea prices shot up 17 percent since the beginning of June.
Clancey believes the growing demand for European peas in feed markets like Belgium and Holland may be why Canada filled a recent Indian tender for human consumption peas all by itself.
But he warned growers about getting bullish because they may chase away demand while they wait for prices to rise.
Clancey said the contraction in European exports could amount to about 200,000 tonnes of peas. That pales in comparison to 900,000 tonnes of carry-in from Canada’s 2009-10 crop and what will be added to that total from this year’s output.
“We have more peas than we have demand for,” he said.
Also, Indian growers are planting a much larger summer or Kharif crop than they did last year. As of Aug. 12, acreage was up 24 percent over the same time in 2009.
And while monsoon rains have been four percent below normal for the country as a whole, they have been normal to excessive in southern India where the summer pulses are grown, said Clancey.
