Lentil and pea exports have fallen this year, but peas’ versatility is expected to give them an advantage
With limited uses for lentils, one market analyst sees more potential for the pea market in Western Canada.
“On lentils we are really restricted to the edible market,” said Marlene Boersch, managing partner of Mercantile Consulting Venture.
“Peas are an incredibly versatile product, so we’re using peas both for human consumption and they are quite usable for feed.”
Both the pea and lentil markets have faced challenges in the past year. Exports were down for the 2017-18 crop year after Canada’s largest buyer of peas and lentils, India, placed import restrictions on the crops, which has led to large stocks of the crops in Canada.
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Boersch said it can’t be assumed that India will remove its import restrictions any time soon, which isn’t good news for the lentil market. However, she does see market opportunities for peas.
“I personally (see the potential for) increased (pea) exports over this year because of the further increases into China, and that’s related to what’s happening on soybeans and various things and on reduced feed grain production in the world,” she said, adding that exports will still be less than the last two years.
With the current dry conditions across Europe and Australia causing reduced feedgrain production and soybeans caught in the crosshairs of the ongoing trade war between the United States and China, there is the possibility that more peas could be used for animal feed.
However, reports from India indicate that there could be crop production problems. According to the state-run India Meteorological Department, as of early last month the monsoon rainfall has been 10 percent below normal. Boersch has heard talk of India reducing its import tariffs on wheat, which she said hints at production problems.
“That points toward the monsoon not being as good as they had hoped for, and then of course, if they have serious problems, that would of course force some rethinking in the protectionist policies,” she said.
However, Boersch said it would take a major weather problem in India to change lentil prices because Canada isn’t the only country with huge stocks from the previous crop year. Australia was also affected by India’s import tariffs and has big stocks.
“Our (lentil) production looks to be OK, so there is just no factor that I could point to right now that (would tighten up) that (supply) up over the next (while),” she said.
