Analysts expect sales to start slowing in the new year and then pick up steam in the spring and summer as demand grows
Green lentil prices have come off their highs and are likely to stay at that level until closer to spring, say industry officials.
Tala Mobayen, a trader with Victoria Pulse Trading Corp., a Canadian pulse exporting firm, said prices have dropped by about three to four cents per pound in the last month.
There was a huge uptick in sales in the March-through-July period due to COVID-19 stockpiling.
That has been followed by a lull in demand in the September-through-December period because many customers have ample supplies on hand.
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Canadian growers have already sold what they intended to sell in 2020 and are willing to hold their remaining supplies until March 2021, she said during the green lentil panel at the Global Pulse Confederation’s Ask The Experts Mexico webinar.
Mobayen said there has been very limited green lentil selling lately because buyer bids are not matching what growers expect to get for the crop.
But there are still eight months to go in the 2020-21 crop year. She expects 2021 to start slow and then pick up steam in the spring and summer. Canada will end the year with very tight stocks of green lentils.
Ramadan is in April, so there should be more Middle East demand materializing around that time of the year.
And COVID has boosted overall lentil consumption by 20 to 30 percent.
“We do expect more demand on green lentils particularly,” she said.
Brian Clancey, editor of Stat Publishing, expects world green lentil stocks to end the year at 174,000 tonnes, resulting in an 11 percent stocks-to-use ratio.
That is getting close to being sold out.
He expects global acres will rise in 2021 but production will fall assuming average yields. That could bring ending stocks down to 149,000 tonnes in 2021-22.
Canada’s top green lentil market in 2019-20 was India. It purchased 91,046 tonnes, which is about double the amount that Colombia and Algeria, Canada’s second and third largest customers, bought.
Tony Roelofs, a trader with Columbia Grain, an American processor and exporter of pulses, said the United States had a large and good quality crop of green lentils and demand has been terrific.
The U.S. government typically buys 5,000 to 10,000 tonnes of green lentils for food aid programs annually. It has already bought 48,000 tonnes in the last six months.
In addition, U.S. domestic demand is up 20 to 25 percent due to changing COVID food consumption patterns.
But just as Mobayen is reporting, there has been a lull in export demand of late with prices dropping two to three cents per pound.
Farmers are cash rich and can wait out the temporary price drop. Roelofs also agrees with Mobayen that there will be a slow start to 2021 and then the market should perk up.
The wild card will be food aid demand. If it remains strong, U.S. ending stocks could get extremely tight.
Clancey said Canada was the top destination for U.S. green lentils in 2019-20, buying 66,366 tonnes of the crop. Much of that was likely re-exported.
The next biggest markets were Spain and Mexico, which bought 33,764 tonnes and 27,338 tonnes respectively.
Clancey said the U.S. appears to be gaining market share in Mexico at Canada’s expense.
Roelofs said that is because the price spread between medium and small green lentils has narrowed to the point where small greens are sometimes sold at a premium.
The U.S. tends to grow medium greens while Canada plants mainly large and small greens.
Mexico buys U.S. medium and Canadian small green lentils and now the U.S. product is more competitive in that market.
He said there has also been an increase in U.S. small green production because the U.S. faces larger Indian import tariffs for its medium green lentils than Canada.
