Pulse market analysts don’t expect harvest pressure to keep pea prices depressed for long because of tight supplies and good demand prospects.
“I think they will increase in price a bit,” said Marlene Boersch, a partner in Mercantile Consulting Venture Inc.
She disputes Statistics Canada’s latest pea acreage estimate but has no quarrel with its 2.13 million tonne production forecast.
Boersch forecasts 250,000 tonnes of carryout from the 2010-11 crop, which would result in close to 2.4 million tonnes of total supply from Canada.
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That would allow for about 1.9 million tonnes of exports in 2011-12, which would be one million tonnes, or one-third, smaller than last year’s program.
“That in itself kind of says a lot,” said Boersch.
Stat Publishing editor Brian Clancey forecasts 1.2 million tonnes fewer peas to sell than last year, which could increase prices to a level that discourages demand, he said in the latest issue of Saskatchewan Pulse Growers’Pulse Market Report.
Boersch said she finds it humorous that pea markets are softening, given the prospect for such tight supplies.
There is harvest pressure from crop coming off the combine, and buyers seem to be content to buy remaining stocks of cheaper old crop peas rather than buying high-priced new material.
“But in the end they will have to come here and in the end it is going to be very tight,” said Boersch.
On the demand side, it appears as though India could once again be an active buyer after a year of limited purchases. India’s pulse imports declined 26 percent in 2010-11 after producing a record 18.09 million tonne pulse crop.
However, the 2011-12 kharif crop is off to a disappointing start as higher prices for competing crops discourage pulse seedings. Pulse plantings are down 11 percent from last year and five percent below normal levels. Pigeon pea acreage is 16 percent smaller than last year’s crop.
Monsoon rains were below normal in July but excellent in August. Officials say total rainfall for the monsoon season is near the 50-year average.
Boersch said pea returns per acre were well below those of other crops at the beginning of seeding, despite attractive government subsidies for growing pulses. That disparity was exacerbated by steadily rising prices for competing crops such as corn, soybeans and rice.
The upshot is that there should be strong Indian demand for imported Canadian yellow peas, especially considering what is happening in chickpea markets.
Yellow peas are a cheap substitute for chickpeas, a staple crop in India that is in short supply this year because of global production problems.
The Mexican chickpea crop suffered serious frost damage, Australia’s crop was downgraded by harvest rains, the Turkish crop was a disappointment and acreage fell in Canada and the United States.
Boersch said chickpea prices look to be “very, very firm” going forward, which means yellow peas will remain an attractive option for Indian importers even at today’s lofty values of $8.50 a bushel.
“The bigger problem will be for them to find enough peas,” she said.
Boersch said tight Canadian pea supplies and India’s smaller kharif crop of pulses will also lend support to lentil markets.
Green lentils are a good substitute for pigeon peas and red lentils are the next cheapest pulse behind yellow peas, so there should be considerable Indian buyer interest in both crops.
“The peas are clearly going to be tight and that is going to play in favour of the lentils as well,” she said.
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