The United Nations Food and Agriculture Organization released a 2005 world pulse crop outlook last week that had no effect on markets but a dramatic impact on attitudes.
“It’s a potent reminder of the fact that world pulse production looks like it will be down this year,” said Brian Clancey, editor of the Stat Publishing markets newsletter. “That carries with it opportunities.”
According to the June 22 FAO report, world pulse production will shrink by 700,000 tonnes in 2005, driven largely by withering crop prospects in
India.
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The world’s leading pulse producing nation is expected to harvest 1.3 million tonnes less than it did in 2004, reflecting smaller plantings and unfavourable weather during the recently completed rabi season.
India’s kharif crop is also off to a bad start. Rainfall has been 49 percent of normal for the first three weeks of the vital monsoon season, according to government sources.
As a result of poor crop prospects, India should increase its pulse purchases to two million tonnes in 2005, said the FAO
report.
That wouldn’t be a record but it is much better than the past couple of years. That should please Canadian farmers, who planted the biggest ever crop of peas this year, said Clancey.
“It’s comforting to know there’s a growing feeling in pulse circles that (India) is going to step in and will probably end up buying more of what we’ve grown this year.”
Canada will likely face stiff competition from other pulse exporters.
Due to a sharp increase in production, Pakistan will likely export 241,000 tonnes of desi chickpeas to India, Bangladesh and Sri Lanka this year. That’s up from 5,300 tonnes in 2004, said Clancey.
Perhaps more worrisome is the anticipated 30 percent increase in U.S. pulse production, driving it to two million tonnes, which is about half of what Canada is expected to produce. That is a lot of subsidized peas and lentils with which to contend.
Export prospects are also improved in Oceania. The FAO expects Australia and New Zealand to produce 1.9 million tonnes of pulses, up 46 percent from the drought-reduced 2004 total.
“I don’t know about that,” said Clancey.
He said a recent Australian Bureau of Agricultural and Resource Economics report called for 1.6 million tonnes of pulses versus the 1.8 million tonnes forecast in the FAO paper. Australia’s winter crop is barely in the ground so anything can happen, he said.
China and Myanmar will also provide export competition into India and other countries.
Anticipated production increases in both countries are helping offset the expected eight percent decline in India, resulting in a three percent overall drop in Asia’s production, a region responsible for nearly half the world’s pulse output.
Another area with good potential for Canada is Brazil, which is looking at a 10 percent decline in bean production due to smaller plantings.
“We should be able to sell some black beans to Brazil later in the calendar year,” said Clancey.
Canada will have to fight competition from cheap Argentinean product in that market. But if Argentina and Mexico are busy supplying Brazil and China is filling a void in India, there should be opportunities for Canadian bean growers in other markets such as the European Union and Central America.
The FAO forecast world trade in pulses to approach 10 million tonnes, a five percent improvement from 2004 levels due to the anticipated production decline in several importing countries and the prospect of larger crops in a number of exporting regions.
