DECEMBER 2016

THE MARKET SITUATION HAS CONTINUED TO BE DIFFICULT FOR PULSES OVER RECENT WEEKS ...

"The market situation has continued to be difficult for pulses over recent weeks and little has changed materially," comments Roger Vickers, Chief Executive of PGRO. "Competition in the export market to Egypt from the Baltic region has not been as fierce as had been anticipated due to poorer than expected quality.

"Quality is also an issue that has affected UK bean production with an estimated 70% rendered unsuitable for export. However, with increased volume of production, merchants appear able to satisfy what has been a reduced demand."

BEPA pic for LHS home page with December

Chris Collings, President of BEPA reports on the North American market where, for 2016-17, Canadian production is estimated to rise by 45% to a record 4.7 Mt, due to higher area seeded. Yellow pea production is forecast to rise and green type production to fall to 0.5 Mt. Production of the other remaining dry pea types is also expected to fall sharply. That said, as stocks are low, supply is forecast to rise by only 25%. Exports are forecast to increase to a record 3.2 Mt. India, Bangladesh and China are Canada's top three markets.

The USDA forecast is for the area seeded to peas in the US for 2016-17 to rise by 11% from last year to a record 1.3 mln acres. This is mainly due to an increase in production in North Dakota. Yields are expected to be average - forecast by USDA to rise by 20% to a record 1.0 Mt.

Human Consumption Beans have seen almost no movement. Values remain around £160/t ex farm having rallied in the previous month. Slight increases in Sterling will be used as an excuse for buyers not to purchase UK produce, but currency issues continue to worsen in the Egyptian market. Recent flotation of the Egyptian Pound saw the value swing from around 8 to 18 Egyptian Pounds/US Dollar as the government sought to attack the currency black market. This has added further problems to bulk vessel importation.

Stock carried over through the summer by the importers has also satiated the desire for new crop and exports to Egypt in the immediate post harvest period have, for these reasons, been running at about 50% of that for the same period last year.

Some sellers appear to have been dissuaded with recent low prices, preferring to play a longer game when availability of suitable quality produce has become an issue. Buyers may come into the market after the New Year - but this is always a guess and a gamble. By then the Australian crop will be fully available and reports are that, although offered at a premium, it is of good quality and availability.

Feed Beans continue to be in demand with ever increasing quantities being absorbed by the feed compounders. Circa £140 ex farm is typical.

Marrowfat peas remain unchanged. Outside of production contracts, marrowfats are proving difficult to place with values at circa £250/t ex farm. Contracts for 2017 production are available, they are likely to be open value or with a minimum maximum price guarantee against sample quality.

Large blue peas have seen little movement with poor quality feed samples trading at a £5-£10 discount to feed beans. Values are circa £132/t ex with 'Second quality' samples suited for processing circa £175/t ex. Best quality samples for processing, splitting and export can make circa £205/t ex. The message remains strong - grow for good quality! There are contracts on a min-max price basis available for 2017.

Yellow peas also have seen no change on the month, remaining undersupplied in the local market. Values are circa £190-£200/t ex. Contracts are available.