Red lentil prices fell a penny per pound last week as Australia began pre-selling its coming harvest.
Pulse Australia said the country will produce 169,000 tonnes of lentils this year, up 78 percent from last year’s drought-reduced harvest and slightly more than normal.
The first loads of Australian lentils are set to depart for the Indian subcontinent later this month, which has dampened price prospects in Canada, said Murad Al-Katib, president of Saskcan Pulse Trading Inc.
He expected red lentil prices to remain around 13.5 cents per lb. in November and December.
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“There’s certainly a chance in the new year we’ll come back to levels where we were,” said Al-Katib.
Where prices go from there will depend on India’s harvest, which begins in late February or early March, and with Turkey’s harvest in May.
Earlier this year, No. 2 red lentils were selling at what Al-Katib called an unprecedented five cents per lb. premium over No. 2 Laird lentils.
“Red lentils were certainly a hot seller over September and October.”
He expected next to no carryover of red lentils into the new crop year.
It’s a far different story for greens, said Merv Berscheid, a broker with CGF Brokerage and Consulting in Saskatoon. His firm predicts that up to half of 2005 production will not be sold this crop year.
Canadian growers produced 1.2 million tonnes of lentils in 2005 on top of 245,000 tonnes of carry-in.
According to Statistics Canada, exports will amount to 600,000 tonnes in 2005-06, leaving behind an 845,000 tonne stockpile of lentils for domestic use and carryout stocks.
Berscheid agreed with Al-Katib that nearly all of the estimated 350,000 tonnes of red lentil production will be exported this year, meaning that all of the remaining 845,000 tonnes will be greens.
“Definitely with green lentils we’re going to have at least a two-year supply,” he said. He sees no recovery in green lentil prices and encouraged growers to sell large and medium-sized greens when bids are available.
“If you don’t make the move, you’re not going to be selling it. That’s what we call delivery risk,” Berscheid said.
He expects growers to plant fewer lentils in 2006 and to move a higher proportion into reds. Farmers who want to keep their input costs in check will likely grow more peas, which have been moving well this fall, he said.
According to Stat Publishing, total export clearances of peas through terminals in Thunder Bay and Vancouver reached a record 548,258 tonnes for the first quarter of the 2005-06 marketing year, shattering the old record of 407,498 tonnes set in 2001.
“Peas are moving fairly well. Prices aren’t great but they’re moving,” Berscheid said.
Al-Katib said if farmers are going to continue planting two million acres of lentils, they are going to have to shift to more reds.
“We do have to match the tastes and preferences of the world market.”
