Pulse Market Update (08.03.12)

BEPA-PMU

International Overview

There is a movement to declare the year 2016 ‘International Year of Pulses’. The movement seeks worldwide recognition and is urging national action in every country. The intent is the celebration of pulses in global nutrition, the provision of critical protein sources, sustainability in the small carbon footprint and nitrogen fixing capabilities of pulse crops, and the health benefits from helping manage heart disease, diabetes and cancers.

Canada’s pea exports rose above 2011 crop to 2.2 million tonnes. Dominant markets are India, China and Bangladesh, but the EU27 is an increasing destination - especially Spain and Belgium. 2013 crop is forecast above 2012 at 1.3 million Ha and, with higher carry over stocks, prices are predicted to fall a little.

French reports indicate a 50% reduction in pea exports to just 74kT to the end of 2012 due to a complete lack of exports to India. Beans exports to Egypt are slightly up on the year to date, but total exports are forecast to be less than the 206kT from crop 2011. Prices for French producers recently reported circa Euro 280/T, Beans at circa Euro 390/T delivered.

The French Ag Ministry confirmed continued support for French protein crop production (dry peas, beans and lupins) to the value of Euro 40 million for crop 2013.

Feed Beans

Old crop market has slackened, supply is drying up. Old crop has become challenged by other cheaper feed sources. High prices in the region of +£101 over feed wheat mean surely the market has reached the top?

Supply is uncertain – the suspicion is that sellers are holding back until spring sowing decisions have been made. There will be an increase in farm saved beans sown this spring, which will place uncertainty on the quantity coming to harvest for both feed and human consumption markets.

New Crop optimism remains high - premiums may be squeezed, but they remain high over historical levels at circa £45 over feed wheat. Good quality product in demand!

Human Consumption Beans

Consumption in the Sudan is reported to be rising each year and bagged sales appear to have grown again in 2012/13.

Crop into Egypt has slowed. The Egyptian £ has continued to fall in value, and inflation is now touching 10%. Two years of turmoil have seen the currency fall 30% in value and the foreign currency reserves fall by two-thirds – they are now reported below the three months import cover requirement. The central bank has prioritised foreign currency availability to importers of basic food stuffs. Australian beans continue to flow into Egypt. 60,000MT have already been delivered and a further 60,000MT are expected in the coming month on 20,000MT bulk vessels.

Beans from France have slowed down and presented some recent opportunities for UK sellers, but this will dry up as the local harvest comes forward in April.

In the short term, the local market is well supplied - there appear to be few sellers and the premium over feed beans is in the order of £30-35/MT. Local produce is expected to be larger this year driven by the higher prices paid for commodities recently. There are no official figures, but estimates of 300-400,000MT are expected.

As previously reported, Ramadan (9 July to 7 August) and the 3-day festival of Eid (the post-Ramadan celebration) will drive consumption. So further export opportunities are expected April/May.

New crop opportunities exist, though with little firm trade. Concept premiums of +£30 over feed beans present an optimistic outlook and possible value in hedging a proportion of the crop planted ahead of harvest.

Combining Peas

Old crop feed peas from France are now cheaper than a month ago. UK prices are starting to fall. Buyers are taking to requirement to avoid high priced stock and have switched to cheaper commodities wherever possible. Stocks are very low and trades are few.

Merchant contracts for new crop peas still available and, importantly, there are supplies of seed for both feed and marrowfat production!

With the UK stocks at almost zero, a premium is likely for the first of the new crop and strong demand for good quality. Contracts at very promising prices in excess of £300/T are still available.

Marrowfats

A very quiet market with little activity - prices may well have peaked. Locally buyers appear covered, and only the very best quality have an export market at this time. There are few, if any, sellers.