Pulse Market Insight #162 MAY 1 2020 | Producers | Pulse Market Insights
Pulses Flying out the Door
It’s clear the reports about increased pulse consumption are more than “fake news” or an interesting human interest story. And it’s far more significant than just buying a couple of extra cans of beans to stash in the pantry. Extra demand from North American shoppers has no doubt been helpful, but it’s the much bigger overseas markets that have pushed the market sharply higher.
Most people have likely noticed, but the average yellow pea bid in western Canada has risen 75 cents per bushel or 10% since early March while red and large green lentils are both up at least 30% over the last two months. And it’s not just old-crop prices, but new-crop bids are also up strongly, just ahead of seeding. This size of market response requires far more than just North American consumers stocking up on pulses.
Now, the handling data is reinforcing the message of much stronger demand from overseas. Canadian pea exports had been very quiet in late February and early March, before the Covid-19 lockdowns became widespread but started to show signs of strength in mid-March. The latest week ending April 26 showed a sharp spike of pea exports at 139,000 tonnes, the highest total since the normal fall surge. Those peas that were purchased at higher prices are now moving out the door.
Part of the reason for the spike in exports could be a timing issue, as China is catching up on the slower pace from several weeks ago. But we are also hearing of increasing moves toward numerous governments stockpiling basic foodstuffs. For most of us in North America, our food concerns lately have mainly been about having all the choices we’re used to. In many other countries however, it’s a matter of having enough food to eat. And in places where pulses are already a key staple, this stockpiling has triggered a monumental shift in the marketplace.
It’s a similar story for lentils, although the buying is likely more widespread than just India. Many countries became concerned about shrinking supplies and boosted their purchases. In the past couple of weeks, all those lentils that farmers sold when prices spiked are now entering the handling system. In the past two weeks, nearly 200,000 tonnes of lentils were delivered and will soon be exported.
While this latest surge in movement is good news, demand had actually been strong for most of 2019/20 and ending stocks for both peas and lentils were already shrinking. Now, the stocks situation is getting even tighter and that will provide more price support. This also spills over into 2020/21, which means next year’s supplies will also be smaller than expected earlier. Now, the next key question is what is happening with seeded area this spring.
Pulse Market Insight provides market commentary from Chuck Penner of LeftField Commodity Research to help with pulse marketing decisions.