If those two countries have average yields, supply and demand will be well balanced, Chuck Penner, an analyst with LeftField Commodity Research, recently told delegates attending the Global Pulse Confederation’s Pulses 25 conference in Singapore.

Last year, there was a concern that the market would be over-supplied, but drought and frost slashed Australia’s production.

Australian farmers are expected to plant the same number of acres as 2024.

“If we pencil in an average yield at this point in time, what we would see is that production would bounce back considerably,” said Penner.

He is forecasting 1.69 million tonnes of production, up from 1.16 million tonnes in 2024-25.

Exports are estimated at 1.5 to 1.6 million tonnes, which would be double the current year.

However, he said the caveat is that it is dry in the main production areas in the states of Victoria and South Australia.

“That’s a real concern there,” he said.

The Australian Bureau of Agricultural and Resource Economics and Sciences is forecasting 1.5 million tonnes of production, which would be 71 per cent above the 10-year average.

Simone Dax, a trader with Louis Dreyfus Company, agreed with Penner that it is early days for the Australian crop, and a lot can happen between now and harvest. July and August will be the telltale months.

If everything goes perfectly, production could meet Penner’s estimate. However, she pointed out that last year, farmers thought they would be harvesting a bumper crop until the rain stopped in July, August and September and then the frosts came.

“It didn’t take long for us to lose a million tonnes,” she said.

Canadian red lentil production is forecast at 1.54 million tonnes, down from 1.73 million tonnes last year. Exports are pegged at 1.33 million tonnes, a five percent drop.

“It isn’t a small crop, but certainly isn’t large either,” Penner told the Pulses 25 delegates.

Moisture conditions were favourable as of the end of May but have turned dry.

Seeded acres are up about one percent to 2.6 million acres.

Will Watchorn, a trader with Viterra, said in-crop weather will be far more important than seeded acres. He noted that Canada’s crops have not lived up to expectations in recent years.

Penner said seeded acreage is up in Russia and Kazakhstan. He is forecasting a combined 800,000 tonnes of production in those two countries, up from about 600,000 tonnes last year.

He expects a 50-50 split between green and red lentils.

Penner is forecasting 400,000 tonnes of Turkish red lentil production. However, since his presentation, the Turkish Statistical Institute released its estimate of 340,000 tonnes, a 16 per cent drop from the previous year.

Red lentil prices have been gradually edging lower in Australia and Canada.

“But overall, the market has been remarkably stable,” he said.

India’s prices have been trading in the US$700 to $800 per tonne range for several years due to the government’s minimum support price for the crop.

Canadian prices usually peak in the late-April to early-May period, but that didn’t happen this year due to India placing a 10 per cent import tariff on the crop.

Binod Agarwal, a trader with SGR Agri, thinks India’s 2024-25 red lentil production was closer to one to 1.2 million tonnes rather than the government’s forecast of 1.8 million tonnes.

However, he estimates that the country has one million tonnes of stocks, which includes government supplies and port inventory.

That should be sufficient to fill demand for the next four to five months.

Agarwal said the 10 per cent tariff makes imports unfeasible for the time being. He does not anticipate any import demand until October and November.

He thinks the red lentil market is going to be oversupplied, but if it stays dry in Australia it could easily be short 800,000 tonnes.

Andac Kolukisa, a trader with Natural Gida, said Turkey has no stocks of lentils.

The country typically imports 500,000 to 550,000 tonnes, with the bulk of that coming from Canada.

However, lentils from Russia and Kazakhstan are making inroads. Turkey imported 180,000 tonnes from those two countries in 2024-25, up from 130,000 tonnes a year ago.

He expects they will soon account for 30 to 40 per cent of imports, compared to 20 per cent in the past.

The National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED) is sitting on a massive stockpile of 800,000 tonnes.

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• Pulse Weekly: Strong export demand boosts green lentils

Binod Agarwal, managing partner of SGR Agri, believes NAFED could potentially release 600,000 tonnes of its reserves into the Indian market.

“To the best of my knowledge, they have never held more than 800,000 tonnes of stock,” he said in an email.

“Some tonnes will need to be flushed.”

The country typically imports about 1.4 million tonnes of red lentils annually. He believes that volume will drop to 800,000 tonnes if the government releases its stocks.

That would obviously be bearish for lentil prices.

However, he noted that it is impossible to predict what NAFED will do because it never provides full clarity to the market.

“NAFED will obviously keep the interest of domestic growers in top priority and act according to the local market to keep the prices in check,” he said.

“As of now, the prices of lentils in India aren’t too high to be concerned about; (that is) the reason why NAFED is sitting out for the time being.”

If NAFED releases stocks, it would eventually need to replenish its supplies with domestically produced lentils, leaving a gap that would then have to be filled by imported product.

Agarwal said the trade believes Indian farmers produced one million tonnes of red lentils in 2024. That is well short of the government’s estimate of 1.79 million tonnes.

“No one knows what the exact number is,” he said.

“If the production is more and NAFED sells its stocks, imports will definitely be lower than 800,000 tonnes.”

Lentil imports are duty-free until March 31, 2025, although he expects that deadline will be extended.

Canada and Australia will be facing competition from the Black Sea region. SGR has heard Kazakhstan will export 250,000 of reds and Russia another 100,000 tonnes.

However, there are bullish factors to consider as well.

India’s trade expects the government to increase its minimum support price (MSP) for lentils by six per cent.

If that happens, the MSP would likely be higher than the market price, encouraging farmers to commit all their stocks to the government.

That means there would be a net 400,000-tonne shortage of product because the government would be purchasing one million tonnes of new crop while releasing 600,000 tonnes of its old stocks.

“India would have to buy approximately 20 per cent more than what they usually buy from the international market,” Agarwal said in a recent newsletter to clients.

Stocks held by the trade in India are “close to nothing” as importers focus more on amassing chickpea supplies.

Buyers had also been anticipating “magnificent” crops from Canada and Australia, but that did not materialize.

Australia’s crop will likely be smaller than one million tonnes, well below the current government estimate of 1.7 million tonnes.

Another potential bullish factor is that soaring desi chickpea prices could also shift some demand to lentils, said Agarwal.

Contact sean.pratt@producer.com

It has managed to wrestle the steering wheel back from Australia after spending two years in the back seat.

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“Australia was your price-maker and Canada your price-taker,” Mostyn Gregg, vice-president of grains and pulses with Olam, said during a recent Global Pulse Confederation (GPC) webinar.

However, drought has returned to the country, which is likely to result in a disappointing crop of about one million tonnes, down from 1.57 million tonnes last year and 1.69 million tonnes the year before that.

There was plenty of optimism early in the growing season, with analysts forecasting as much as two million tonnes of production.

The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) was still calling for 1.7 million tonnes in its September crop report, but that number now appears to be wildly optimistic.

Gregg said it is reminiscent of Canada’s dismal 2021 crop when production plummeted to 1.59 million tonnes from 2.87 million tonnes the previous year.

“I think we’re seeing something similar here,” he said.

That should bode well for prices, but it hasn’t due to India’s onerous stocks, lacklustre demand from Turkey and good crops in Canada and Russia.

Mitchell Elks, a trader with AGT Foods, said the crop was looking decent up until two months ago despite the lack of moisture.

However, then it got hit with a killing frost, with temperatures dipping to -5 C for an extended period in South Australia and parts of Victoria.

He is concerned about Australian growers holding out for better prices while Canadian growers are busy marketing their 1.6 million tonnes of red lentils.

“Certainly, Australia will now take the back seat,” he said during the GPC webinar.

Buyers who want to pry red lentils out of the hands of Australian farmers will have to pay a premium.

Elks said Australia will likely still service markets in India, Bangladesh, Pakistan and the United Arab Emirates, but it will likely lose markets like Egypt and Turkey to Canada.

Gregg believes that with carryout there will be one to 1.2 million tonnes of Australian red lentils available for export, down from about 1.7 million tonnes in the crop year wrapping up. How much of that gets shipped depends on the growers.

“It’s going to be difficult to pull those lentils out of a disengaged grower’s hands,” he said.

It’s an entirely different story for the desi chickpea crop, which is grown in areas of Australia that received ample rainfall.

He thinks growers could harvest two million tonnes of the crop, up from 491,000 tonnes last year and 541,000 the year before that.

The analysts believe ABARES is dead wrong with its September forecast calling for 1.3 million tonnes.

Elks just spent three weeks driving around Australia’s main chickpea growing areas.

“It’s some of the best crops I’ve even seen,” he said.

There were fields above his knees with 70 to 90 pods per plant, each containing at least two seeds with 10 to 20 per cent housing three seeds.

Elks believes the crop will easily reach two million tonnes if it gets another 10 to 20 millimetres of finishing rain.

Australia’s desi chickpeas could help fill the void in India that is being met in part by Canadian yellow peas.

Peter Wilson, head of Australian pulses with Louis Dreyfus Co., said the crop is reminiscent of the record 2.4 million tonnes harvested in 2016-17.

However, there are big logistical differences between the two crops.

Containers did the heavy lifting in 2016-17, but container freight rates are too high this year and Australia does not have the bulk capacity to move that big of a crop.

Wilson said it is going to be a “tough ask” to get Australia’s chickpeas to market during this pre-Ramadan window.

Elks agrees that transportation logistics will be a massive challenge this year.

“Containers are exceptionally difficult to get,” he said.

If Ramadan was further out on the calendar it might be workable, but it’s not.

“You’ve got front-end demand from everybody,” he said.

Elks estimates 400,000 tonnes of desis have been forward sold for the October to December period, but he believes exporters will have a tough time executing on those contracts.

Gregg was asked if India will extend its import tariff exemption on desi chickpeas past March 2025.

He said that depends on India’s crop, noting that it has an excellent moisture profile right now.

Elks agreed that there appears to be a decent crop coming in India due to above-average rainfall.

He wonders if India will put the tariffs back in place if Australia dumps 400,000 to 500,000 tonnes of desis on its doorstep in the January-February-March period.

Contact sean.pratt@producer.com

“I can see more of the bullish factors rather than the bearish news,” AgPulse Analytica analyst Gaurav Jain said at the Global Pulse Confederation’s (GPC’s) recent Macau Pulses Congress.

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The market has already factored in big crops from Canada and Australia, so most of the bearish news has been absorbed.

Something needs to happen to jolt the market out of its current doldrums and he thinks that is likely to be a bullish factor, such as a worse-than-anticipated Australian crop.

The Australian government is forecasting 1.7 million tonnes of production. Some analysts were thinking it could be as high as two million tonnes.

But Jain said it could be as small as 1.2 million tonnes as growing conditions deteriorate in that important production region.

Peter Wilson, a trader with Louis Dreyfus Company, said conditions in Western Australia are adequate, there are good yield prospects in the northeast, but Victoria and South Australia are very dry.

He agrees that production could be as low as 1.2 million tonnes.

“That’s quite a drop in potential,” he said in a recording of the GPC’s Sept. 11 Lentils Panel discussion.

Canada’s final harvest numbers could also prove disappointing.

Jain is forecasting 2.69 million tonnes of production, up from 1.8 million tonnes last year.

Will Watchorn, a trader with Viterra, thinks that estimate is 400,000 to 500,000 tonnes too high because it stopped raining in Canada late in the growing season.

But that also delivered some benefits.

“The quality we have this year is once again excellent,” he said.

Jain is forecasting 900,000 tonnes of Canadian green lentil production, up from 565,000 tonnes last year. Watchorn thinks it is closer to 700,000 tonnes.

Either way it’s a big crop that is putting downward pressure on prices.

“We have already seen prices of green lentils coming down sharply,” he said.

Jain is estimating 402,000 tonnes of U.S. lentil production and 250,000 tonnes of exports in 2024-25.

“Supply is higher than demand for greens this year, both from the U.S. and Canada,” he said.

That is why he is forecasting “further downside” for that class of lentils.

Harsha Raj, a buyer with Mayur Global Corp., said green lentils substitute for pigeon peas in the Indian market and the stocks of pigeon peas are “negligible” at this time.

She noted that a lot of lentil purchasing has already taken place.

“The next round of buying will depend on what kind of production we see for pigeon peas this year,” said Raj.

Stat Publishing editor Brian Clancey recently shared some thoughts on that in an article on the Stat website.

He believes India could produce 3.7 million tonnes of pigeon peas this year if yields were average. That would be up from 3.39 million tonnes last year and 3.31 million tonnes the previous year.

But yields might well be above average due to excess monsoon rains.

“Given prospects for improved pigeon pea production this season and increased cross commodity competition for demand, there is a risk India’s green lentil imports will ease after December,” said Clancey.

Jain is forecasting 4.4 million tonnes of Indian pigeon pea production, which would minimize the replacement demand for green lentils.

“The prospects are looking much better than last year,” he said.

In addition, he estimates the country produced 1.62 million tonnes of lentils that were harvested in March/April.

The government is sitting on an estimated stockpile of another 808,000 tonnes of the crop.

“India right now does not need much more lentil imports,” he said.

He is forecasting 1.15 million tonnes of imports for 2024-25, down from 1.68 million tonnes the previous year.

Raj is not as pessimistic. She thinks India’s crop was smaller than 1.62 million tonnes.

She also noted that desi chickpea prices are on the rise in India due to a “huge shortage” of that class of lentils.

“We will definitely see red lentils going as a chana (desi chickpea) substitute,” said Raj.

She said imported stocks of red lentils are less than 100,000 tonnes, which is very low.

The market is relying on the government’s buffer stocks and strong red lentil planting in the upcoming rabi season.

Russia, Kazakhstan and Turkey are the other big players in the lentil market.

Jain is forecasting 360,000 tonnes of exports from Russia in 2024-25 and another 250,000 tonnes from Kazakhstan.

Lika Khoptyanets, a trader with Exim Asia, said harvest in Kazakhstan was late this year due to persistent rainfall.

She estimates that 60 to 70 percent of the crop is reds, with the remainder greens.

“We are very worried about the quality,” said Khoptyanets.

There are more problems with wrinkling and staining than usual.

Yusuf Memis, a trader with Bashan, estimates that 55 to 60 percent of Russia’s crop is green lentils, with the remainder red.

He said the Black Sea crop comes off earlier than those in Canada and the U.S. and helps fill the supply gap at that time.

Memis said Turkey produced enough lentils to satisfy its own domestic demand of about 300,000 tonnes.

But the country does another 450,000 tonnes per year of “transit business,” importing lentils, processing them and shipping them out to customers in the region.

Contact sean.pratt@producer.com

Major exporters have big crops on the way and demand could be subsiding in two key markets, said Gaurav Jain, an analyst with AgPulse Analytica.

Turkey is expected to import 522,000 tonnes of the crop, down from a whopping 675,000 tonnes this year, according to a presentation Jain prepared for the Global Pulse Confederation’s Pulses 23 conference.

The anticipated decline is due to uncertainty surrounding one of the country’s main re-export destinations.

The Iraqi government has been tendering for pulses the past two years, shifting demand from private sector hands to government control.

That policy shift has led to a considerable increase in Iraq’s lentil demand from Turkey and the corresponding need for Turkey to import more red lentils from Canada and Australia.

Iraq bought 220,000 tonnes of lentils from Turkey in 2022, up from 60,000 to 70,000 tonnes per year the previous three years.

However, the policy expires in June, and it is not clear whether it will be renewed or for how long if it is renewed.

Jain is assuming it will not be renewed for another full year, which is why he is dropping Turkey’s import and export numbers.

Turkey’s 2023-24 total export program is pegged at 430,000 tonnes, down from 550,000 tonnes this year.

India is the other key red lentil import market. Farmers in that country just harvested a bin-busting 1.59 million tonnes of the crop, a 25 percent increase over last year.

Imports are expected to decline to 710,000 tonnes from 858,000 tonnes in 2022-23.

Demand from the world’s largest importer could have been a lot worse if it wasn’t for a dismal pigeon pea crop.

The price premium for pigeon peas over lentils has bulged to 50 rupees per kilogram, up from the more typical level of five rupees per kg.

“That is making people switch to lentils,” said Jain.

The other factor propping up India’s lentil demand is the country’s surprisingly robust export program to Bangladesh.

It is expected to ship 100,000 tonnes to that market in 2023-24, up from 21,000 tonnes a couple of years ago.

Australia and Canada are reluctant to ship product to Bangladesh because of payment issues, but India has a favourable trade agreement with its neighbour that provides Indian exporters with the confidence they will get paid.

The Indian government is taking steps to bolster lentil and pigeon pea production, recently bumping up the minimum support price for both crops.

The government has also removed the 40 percent ceiling on the quantity of pigeon peas and lentils it will buy from growers under the Price Support Scheme, according to a Stat Publishing article.

“The assured procurement of these pulses by the government at remunerative prices will help motivate the farmers to enhance sowing area in respect of (pigeon peas), urad and (lentils) in the upcoming kharif and rabi sowing seasons in order to enhance the production,” said the government.

The Australian government is forecasting 2023-24 lentil production at 905,000 tonnes, a 36 percent drop from this year’s 1.41 million tonnes.

Jain agrees with the forecast for the upcoming harvest but thinks the 2022-23 crop is closer to 1.25 million tonnes.

AgPulse estimates Australia’s 2023-24 exports will fall to 950,000 tonnes, a 21 percent decline.

Jain is forecasting 1.74 million tonnes of Canadian red lentil production in 2023-24 and 1.61 million tonnes of exports, a 9.5 percent increase over the current campaign.

Canada shipped out 1.15 million tonnes of red lentils through the first nine months of 2022-23. Turkey and India accounted for 69 percent of that volume.

Major exporters have big crops on the way and demand could be subsiding in two key markets, said Gaurav Jain, an analyst with AgPulse Analytica.

Turkey is expected to import 522,000 tonnes of the crop, down from a whopping 675,000 tonnes this year, according to a presentation Jain prepared for the Global Pulse Confederation’s Pulses 23 conference.

The anticipated decline is due to uncertainty surrounding one of the country’s main re-export destinations.

The Iraqi government has been tendering for pulses the past two years, shifting demand from private sector hands to government control.

That policy shift has led to a considerable increase in Iraq’s lentil demand from Turkey and the corresponding need for Turkey to import more red lentils from Canada and Australia.

Iraq bought 220,000 tonnes of lentils from Turkey in 2022, up from 60,000 to 70,000 tonnes per year the previous three years.

However, the policy expires in June, and it is not clear whether it will be renewed or for how long if it is renewed.

Jain is assuming it will not be renewed for another full year, which is why he is dropping Turkey’s import and export numbers.

Turkey’s 2023-24 total export program is pegged at 430,000 tonnes, down from 550,000 tonnes this year.

India is the other key red lentil import market. Farmers in that country just harvested a bin-busting 1.59 million tonnes of the crop, a 25 percent increase over last year.

Imports are expected to decline to 710,000 tonnes from 858,000 tonnes in 2022-23.

Demand from the world’s largest importer could have been a lot worse if it wasn’t for a dismal pigeon pea crop.

The price premium for pigeon peas over lentils has bulged to 50 rupees per kilogram, up from the more typical level of five rupees per kg.

“That is making people switch to lentils,” said Jain.

The other factor propping up India’s lentil demand is the country’s surprisingly robust export program to Bangladesh.

It is expected to ship 100,000 tonnes to that market in 2023-24, up from 21,000 tonnes a couple of years ago.

Australia and Canada are reluctant to ship product to Bangladesh because of payment issues, but India has a favourable trade agreement with its neighbour that provides Indian exporters with the confidence they will get paid.

The Indian government is taking steps to bolster lentil and pigeon pea production, recently bumping up the minimum support price for both crops.

The government has also removed the 40 percent ceiling on the quantity of pigeon peas and lentils it will buy from growers under the Price Support Scheme, according to a Stat Publishing article.

“The assured procurement of these pulses by the government at remunerative prices will help motivate the farmers to enhance sowing area in respect of (pigeon peas), urad and (lentils) in the upcoming kharif and rabi sowing seasons in order to enhance the production,” said the government.

The Australian government is forecasting 2023-24 lentil production at 905,000 tonnes, a 36 percent drop from this year’s 1.41 million tonnes.

Jain agrees with the forecast for the upcoming harvest but thinks the 2022-23 crop is closer to 1.25 million tonnes.

AgPulse estimates Australia’s 2023-24 exports will fall to 950,000 tonnes, a 21 percent decline.

Jain is forecasting 1.74 million tonnes of Canadian red lentil production in 2023-24 and 1.61 million tonnes of exports, a 9.5 percent increase over the current campaign.

Canada shipped out 1.15 million tonnes of red lentils through the first nine months of 2022-23. Turkey and India accounted for 69 percent of that volume.

Contact sean.pratt@producer.com