Pulse crop exports are exceeding last year’s record pace, which has buyers already locking up next year’s crop.
Bulk shipments of peas were 1.14 million tonnes through Oct. 23, week 12 of the 2015-16 crop year, which is 16 percent ahead of last year.
Bulk lentil shipments were 292,300 tonnes, almost double last year’s pace at this point.
A lot of lentils and peas are shipped by container, which is tracked by Statistics Canada.
The Statistics Canada data is available only for August, but Chuck Penner, analyst with LeftField Commodity Research, expects that container shipments have been brisk as well.
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“We have this exceptional pace,” he said. “Because we had such low suppliers going in, there was a huge amount of pent-up demand.”
The pea and lentil export program usually begins well in advance of canola, wheat and other crops because pulses are among the first crops to be harvested.
That situation was exacerbated this year because a lot of peas and lentils were in the bin when the August and September rain came in Saskatchewan, which delayed the harvest of cereal and oilseed crops.
“It kind of gave (pulses) a bit of a running start at the year,” he said.
Most of the peas and lentils that moved during the first three months of the crop year were contracted. Farmers are sitting back and being more patient with their remaining stocks.
“That’s part of what’s driving the market higher right now, is farmers have already generated quite a bit of cash and they’re bullish and rightfully so,” he said.
Stat Publishing reported a weekly grower closing price of 45 cents per pound for No. 1 red lentils as of Oct. 30, up from 36 cents a month ago.
The price for large yellow peas was $9.50 per bushel, up from $9 a month ago.
Penner said the recent run-up in yellow pea prices has not been as dramatic as red lentils because pea buyers in India have temporarily filled their cupboards.
It has also been kept in check by the Indian government’s attempts to eliminate hording by pulse traders and importers to keep food price inflation in check.
“They tried to flush a bunch of pulses out into the market,” Penner said. “That had a little bit of an effect but really not much.”
Importers balked at the policy measure, saying it would ultimately reduce imports and drive up pulse prices in India. The government has relented and is removing the stock limits on importers but implementing time limits for product to move through their warehouses.
Large green lentil prices were 53 cents a pound at closing Oct. 30. Stat Publishing said prices have been this high only less than 10 percent of the time during the history of the crop.
Green pea prices were $8.50 per bushel as of the end of last week, which is $1 per bu. below yellow peas.
“That’s the one area where we have comfortable supplies,” said Penner.
Canadian buyers were offering new crop pea and lentil contracts in October, which is well ahead of the usual January time frame.
Penner said companies are offering 32 cents per lb. for new crop red lentils and $8.50 per bu. for yellow peas with act-of-God clauses to protect growers against production shortfalls.
“To be able to contract at those prices is just unheard of,” he said.
Penner said it’s a no-brainer to sign up at those prices, and he anticipates many established pulse growers have already signed contracts.
“Don’t sell everything of course, but I would sell into the rallying market,” he said.
The anticipated surge in next year’s pea and lentil acres is one good reason to sell, as long as seed is available.
“We’re going to see lentils everywhere from Rosenort (Man.,) to Rosetown (Sask.,)” said Penner.
That could drive prices lower, depending on what happens with India’s rabi (winter) crop. Pulse prices are also attractive in India, so he expects India’s farmers to harvest a big rabi crop in February and March.
“If they don’t, yikes, it’s a good time to be a pulse grower,” said Penner.
Contact sean.pratt@producer.com
