Desi chickpeas are leading the pulse price parade but another crop is marching along in stride.
“Yellow peas are on a journey to seek substitute value,” said Greg Kostal, pulse crop analyst with Kostal Ag Consulting.
Buyers in India and Pakistan prefer chickpeas but if prices get too high, they will readily switch to yellow peas. With desi values at a record high in Canada, some substitution is starting to happen.
“You’ve got yellow peas in Moose Jaw that are bid firmly at $4.50 per bushel and gradually creeping higher. That’s about $1 per bu. higher than the summer months. I think that’s pretty fabulous for this time of year,” said Kostal.
Read Also
Canada-U.S. trade relationship called complex
Trade issues existed long before U.S. president Donald Trump and his on-again, off-again tariffs came along, said panelists at a policy summit last month.
Wild Oats Grain Market Advisory analyst John Duvenaud said the situation resembles 2003 when Australia pea exporters were forced to fill orders with Canadian product. Pea prices climbed as high as $6 per bu. that year.
The stage is set for a repeat performance with strong demand from India complemented by poor crop conditions in Australia.
“It looks like somebody is in here buying peas and (Australia) is the logical one,” said Duvenaud.
The Australian Bureau of Agricultural and Resource Economics predicts 360,000 tonnes of pea production, down 25 percent from last year’s harvest and 24,000 tonnes below the previous five-year average.
Agriculture Canada pulse market analyst Stan Skrypetz said 90 percent of the Australian crop is dunn peas, which compete head-to-head with Canadian yellow peas in the Indian subcontinent.
Skrypetz forecasts yellow pea prices in 2006-07 will exceed last year’s values. While demand looks strong in the Indian subcontinent, sales to China, Canada’s third largest pea customer, have been disrupted by that country’s unexpected enforcement of selenium maximum residue limits.
“That’s a big question mark for this year,” he said.
Duvenaud said today’s yellow pea prices are enticing. But with India seeking product and Australia expecting a below average harvest, there is no reason to expect a price collapse soon.
“It would be logical to make some sales but not to be sold out, that’s for sure.”
Mike Jubinville of Pro Farmer Canada offered similar advice in last week’s market commentary. He expects demand to remain strong into Christmas and hopes yellows will hit $5 per bu., but he encouraged farmers to consider selling a portion of their crop at today’s prices.
Kostal warned that when buyers feel they have covered their demand, prices will retreat in a hurry. But like Jubinville, he believes the trends are in place to maintain values in the short term.
“I think there’s another one or two months here of upside. Then the risks are going to increase.”
