Pulse Market Update (07.10.13)

International overview

Canadian production for 2013-14 is estimated to decrease marginally to 3.3 million tonnes. Low current stocks mean availability is forecast to fall by 4%. India, China and Bangladesh remain Canada's top markets, but exports are forecast to decrease to 2.5 million tonnes and, with lower domestic consumption, stocks are forecast to rise sharply. The average price is expected to fall from 2012-13 highs, but remain historically high.

US area for dry peas for 2013-14 is forecast by the USDA to rise by 30% from 2012-13. AAFC (Agriculture and Agri-Food Canada) assume normal yields and harvest, predicting US dry pea production to increase by 21%.

Australian crop reports are good, but the crop is not yet in the export market. Strong competition with bean export trade is anticipated when available and may put downward pressure on price.

French pea crops performed well with yield and quality slightly up on 2012 and on the long term average. Bean crops were hit by the dry heat of summer resulting in small grain size, poor visual appearance and with excess bruchid damage. Lower yield and quality competing with good UK crop. The first new crop bulk vessel exports to Egypt are pressuring prices with a slight downward trend.

Egypt To date, money does not appear to be quite the issue exporters had feared. UK shippers could potentially supply an additional 100,000 tonnes more this year as buyers prefer UK to French 2013 crop. As bulk vessels arrive through the autumn the market is likely to weaken.

Sudan’s local producers are protected, with import restrictions from March through the summer. Markets remain quite quiet, but local crop is again lower so good interest is expected.

Field Beans - general

Bean quality from the UK harvest is generally good and, as the harvest moved north, it has become clear that generally the very best samples have come from crops in the midlands and north. Yields have been higher than the long-term average with many growers achieving around 5 tonnes per hectare and some exceptional returns of over 8 tonnes.

Bruchid counts are low and, from the lab samples received at PGRO, disease and nematode counts are very low too. The hot weather of summer appears to have diminished a lot of potential ills.

The UK crop may yield over 100,000 tonnes more than the historic low of 2012 crop, perhaps reaching 450,000 tonnes. Forward trading is very active with sellers keen to take advantage of the good prices the market is presenting. Despite the increase in availability, the product is in demand and the prospects for 2014 harvest look good too.

The open autumn is leading many to take advantage of a winter sown crop which may leave less area for spring sown crops in 2014. With returns on beans and peas looking excellent - and the recognition of the numerous agronomic benefits - perhaps beans will not lose all the ground they have regained in 2013.

Feed Beans

With crop quality so good, there is a shortage of feed beans in the market and this is holding up the price. Prices for feed beans, still around £200/tonne, remain at a healthy premium over feed wheat despite its recent slight rally. There is little likelihood of prices increasing, with availability of imported peas a threat as an alternative in the feed market.

Human Consumption Beans

Export demand looks good for trade during the remainder of the calendar year. UK forward sales are strong. Good availability of human consumption quality has eroded the premium over feed – it has now fallen below £15 per tonne, with prospects of it falling further.

Combining Peas

Prices remain good, but behind the highs of 2012. Prices vary widely depending upon degree of bleaching. With bypass vining peas still in the market, prices can range between £175/tonne to over £350/tonne for the very best quality marrowfats.

Canadian supplies are holding down the prices for blue peas making export opportunities difficult, and availability of cheap yellow pea imports is putting a ceiling in the feed market. Local buyers, perhaps wary of the very high prices of 2012 crop, may not be taking forward positions.

Far eastern markets are now looking for the very best marrowfat samples for the snack market. Colour remains key to achieving the very best prices. Many other marrowfat users have already secured forward requirements until the turn of the year. Contracting for 2014 crop is moving quickly with a significant acreage above that achieved at this time last year already secured, indicating potentially strong interest in peas for 2014.