The 2021-22 lentil market is shaping up to be more of the same, depending on a couple of important factors, says an analyst.
“It looks like a similar year,” said Marlene Boersch, managing partner of Mercantile Consulting Venture.
Canada’s top two lentil export markets will likely be importing around the same amount of the crop as they did last year, according to reports on the Global Pulse Confederation’s (GPC) website.
Saurabh Bhartia, Viterra India’s senior trader, told GPC that he is anticipating 800,000 to one million tonnes of Indian lentil imports in 2021-22 depending on the size of India’s harvest.
India is forecast to import 950,000 tonnes of the crop in the 2020-21 marketing year.
McDonald Pelz Global Commodities is forecasting 1.15 million tonnes of Indian lentil production in 2021-22, according to the GPC.
That is well below the official Indian government forecast of 1.35 million tonnes.
Boersch said the McDonald Pelz estimate sounds about right. In fact, she has the identical estimate in her 2021-22 demand forecast.
She is forecasting 800,000 tonnes of Canadian sales to India, which would be slightly below its 2020-21 purchases.
Fethi Sonmez, chief executive officer of Armada Foods, a Turkish processor and importer/exporter of pulses, told GPC in a recent podcast that farmers in that country increased red lentil plantings by 30 percent.
However, there is a deficit of subsoil moisture, so there is a risk of drought. He said it is too early to have a credible production estimate.
He believes Turkey will import around 400,000 tonnes of chickpeas in calendar year 2021, up from the long-term average of 350,000 tonnes but well below last year’s 600,000 tonnes.
“We will not see the pandemic numbers, the 2020 numbers,” said Sonmez.
Turkey was Canada’s second biggest lentil customer in 2020, buying 534,160 tonnes of the crop. India led the way with 991,015 tonnes of purchases that calendar year.
Boersch is forecasting 475,000 tonnes of Canadian lentil exports to Turkey in marketing year 2021-22.
She said her India and Turkey import estimates could be off by 50,000 tonnes either way but that won’t be as big of a market factor as Canada’s yields.
It is dry in Western Canada’s lentil producing region. She has heard forecasters comparing soil moisture conditions to 1988, which was a bad drought year.
Boersch thinks Canadian acres will be up slightly compared to last year, but production will fall if there are average yields.
The big question is — will there be average yields?
“There is a little bit of a flag in terms of dryness right now, but that’s just a flag. We’re only in March,” she said.
Boersch is forecasting a 100,000 tonne increase in ending stocks, largely because of a reduced export program. That means prices are unlikely to move higher than where they are today.
Canada benefited from a COVID bump in demand in 2020 and exceptionally good rail service.
“That is such a major factor. I can’t emphasize that enough,” she said.
However, her predicted increase in ending stocks in 2021-22 could easily be eliminated by a drop in Canadian production if the forecast for drought pans out.