Markets

Australia’s reduced chickpea supply meets lukewarm Indian demand

Henry Wells, November 6, 2017

AN AMPLE supply of Indian pulses and difficulty for importers in securing bank credit are diminishing demand for the Australian desi chickpea crop now being harvested.

Lower target likely for Australian chickpea container export

While Bangladesh, Pakistan and India are the big three South Asia buyers of Australian pulses, India’s situation most heavily influences Australia’s pulse marketing outlook.

Nidera Australia pulse trader, Rob Brealey, said two distinct issues were pressuring India at present.

“India’s own crop was bigger than even the most optimistic expectations,” he said.

In stark contrast to recent years’ tight supplies, current availability has seen locally grown stock continue to hit the Indian market.

“The second issue is financial; banks have pulled in lines of credit available to importers.”

The combined effects of poor profitability of importers and reduction in local prices have cut banks’ willingness to finance inventory in fresh transactions in that marketplace.

“The price of almost every pulse commodity is between half and two-thirds what it was last year.

“High-priced stock failed to clear, which has affected importers’ capacity to buy.”

This year’s volume of chickpeas booked for container exports October to December was reported to be down by perhaps two-thirds compared with bookings at the same time last year.

Mixed quality

Other traders told Grain Central the 2017 season was a “polar opposite” to 2016, but deliveries off the header last month and into November towards export channels appeared to be just keeping pace with customers’ requirements.

AgVantage Commodities Narrabri-based managing director, Steve Dalton, said it was a tough harvest.

“Chickpea quality is very mixed in the harvest to date as you track from the Central Queensland region, around the Darling Downs and south through the Queensland-NSW border.”

“Along with weather damage issues, yields are also affected.

“Once you get south of the border it does improve, although there’s a reasonable amount of harvest yet to be done.

“Yields reports of 0.2 to 0.5 tonnes per hectare are not uncommon and, once you deduct the seed growers would retain for planting next year, returns are pretty sad.”

Mr Dalton quoted the nearby delivered container terminal (DCT) market late last week at around A$850/t bid and $860/t offer.

The Narrabri delivered market was bid around $770/t, though the offer side was poorly defined because few farmers were selling.

Mr Dalton said tough seasonal conditions had reduced forward selling of this year’s crop.

Nidera’s Rob Brealey said seasonal conditions had made this chickpea harvest a mixed bag.

Contrasting poor Goondiwindi-region yields, Mr Brealey said better yields of 1-1.2t/ha had been reported in northern NSW, and pockets of Central Queensland were also a bright spot.

“While Central Queensland harvest suffered weather damage to varying degrees, 70 per cent of the crop in CQ was harvested in good condition.”

In later-maturing regions such as the Liverpool Plains of NSW, the outcome of last month’s rain events remains to be seen, but the weather has probably done more good than harm.

CQ experience

Emerald-district grower, Rob Ingram, has grown most of his 2017 chickpeas under irrigation and said while yields and prices were down on last year, the returns were still above average.

“Gross margins are still historically high, and chickpea crops provide fantastic cash flow for us during the winter,” Mr Ingram said.

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