Market Outlook (PCN Fall 2013) OCT 21 2013 | Consumers and Producers | Pulse Crop News
This article appeared in the Fall 2013 issue of Pulse Crop News.
Charlie Pearson, Alberta Agriculture and Rural Development
International crop prices have come dramatically over the past summer from the historically high prices of the 2012/13 crop year. The main driver pushing prices lower has been better crop production conditions around the world in 2013 after the major production problems in several regions around the world but mainly in the US mid-west during 2012. The market responded to the later crop and dry conditions in the mid-west during August but the crop still promises to be larger than in 2012. The overall declines in international crop values will set the tone for Alberta pulse prices.
What factors are influencing world pulse markets?
India will again be a key factor in determining the direction of Alberta pulse prices and export volumes. The value of the Indian currency (the rupee) has declined relative to other world currencies reflecting problems in their general economy. The lower valued rupee impacts the cost of pulse imports in their currency and the affordability/ability to import pulses. This factor has potential to slow pea and lentil exports this fall. The results of the Indian rabi season crop (crop harvested in February and March) will be the factor determining import needs in 2014. China will remain a bright spot in the field pea market as exports to this region continue to grow.
Canadian pulse crops in general and more specifically peas and lentils had relatively small carryovers as a result of the larger than anticipated export volumes in 2012/13. Canadian lentil and pea production is estimated by Statistics Canada to be 1.6 million tonnes and 3.3 million tonnes respectively in their first crop production estimate of 2013.
Current prices in late August for green human consumption peas are about $10 per bushel ($360 per tonne) and $7 per bushel ($250 per tonne) for yellow human consumption peas. Given the increases in green pea acreage, the premium over yellow peas is expected to decline this fall.
Prices for all classes of top grade lentils are running about 20 cents per pound ($440 per tonne). Supplies of green lentils are expected to be more than adequate to meet export needs and this will limit price gains. Red lentils reflect opportunities in a larger and more diverse world market and therefore, more opportunity for price improvement.
Marketing strategies for pulses
Early in October, western Canadian pulse will have good estimates of field pea and lentil production numbers and equally as important, quality. The next steps will be to evaluate your marketing plan based on the volume of peas and lentils you have already sold, the marketing plans for your other crops and finally your planned sales for the coming winter.
Marketing crop in the coming year could be a challenge for all crops but pulses in particular given the potential size of this year’s western Canadian crop production and what should be an extremely large export program for all crops off the west coast. Port capacity (particularly west coast) is likely to be challenged by the volume of crops that will be exported in the coming year. Setting realistic price targets and arranging delivery periods for your pulse crop will be critical over the next nine months.