CHINA has consolidated as a market of significance for containerised Australian field peas.
It’s a market usually sown up by Canada, which in 2020-21 produced 4.5 million tonnes (Mt), with China its biggest export market.
However, drought saw Canada’s 2021-22 crop come in 2.3Mt, and exports fall from 3.6Mt to 2.1Mt
In December, ABARES forecast the 2021-22 Australian field pea crop at 261,100t, and it seems a chunk of that will go to China in what could well be a one-off event, provided Canada produces a normal crop from its upcoming harvest.
Assisting the sale of Australian field peas to China is the container flow, between the two countries, carrying Australian product including sorghum, mungbeans, milling wheat and rolled oats as well as field peas to China, packed into boxes that have brought manufactured goods to Australia.
While vessel sailings and freight rates to China still fluctuate, this North Asia route is arguably the most reliable and cost-effective available to Australian shippers.
Its rates per 20-foot container are quoted at around US$500-$1500, compared with more like $4000-$10,000 for those on the problematic South Asia and Middle East routes.
Pea prices lift 20pc, stabilise
The surge in demand has seen Australian field pea prices hit $650 per tonne delivered container terminal (DCT) and stabilise, up around 20 per cent from $520/t in October.
“At harvest, pea prices rose because China needed them,” Unigrain co-CEO Andrew May said.
“Last year, peas were really soft, and priced in the low $400s on farm; currently they’re in the 500s.”
In the 2020-21 (Oct-Sep) marketing year, Australia exported a total of 116,734 tonnes of field peas, split and unsplit, with Bangladesh on 26,935t and Malaysia on 26,758 the biggest markets.
China on 25,353t, or 22pc of the total, was not far behind.
In the opening three months of the 2021-22 shipping year alone, China has emerged as the biggest destination by far, taking 36,959t, or 79 per cent, of the 47,068t shipped in total between October 1 and December 31.
China uses peas for human-consumption markets, the largest being protein isolates made at fractionation plants.
Peas also go into noodles and specialist baking, as well as the stockfeed market.
The rally in field pea prices has seen Australian stockfeed manufacturers switch from peas to the relatively cheaper faba beans, as outlined in the faba bean section of Grain Central’s latest Pulse Update.
Freight a factor
Speaking last Wednesday at the Global Pulse Confederation roundtable on the market outlook for Australian pulses, SEAWAY business development manager Don Fernandez said since COVID disrupted global trade flows two years ago, container markets have been “brutal to say the least”.
Australian pulse exporters have traditionally exported large volumes of containerised chickpeas, field peas, lentils and mungbeans to South Asia, and its reliance on transshipment has seen it bear the brunt of reduced, expensive and unreliable services.
However, direct services to China, which can also take in South-east Asian ports, are by comparison much more affordable, and sorghum to China has been the driver for the past year.
“The market is shipping sorghum to China – that’s where the market is,” Mr Fernandez said.
“That’s not what Pulse Australia wants to hear.
“For Q1, Q2 and probably Q3, it’s 20 and 40-footers going into China.”
Mr Fernandez said the job of global container controllers was to show where the best opportunities were for their equipment.
“At the moment, that is China.”
“No containers have been encouraged to go to the Middle East, or the Indian sub-continent.”
Trade sources ssay that is primarily because of the expense and difficulty in repositioning containers back to China, which is the epicentre of the world’s most lucrative shipping routes at present.
Mr Fernandez said Australian pulse exporters might see “the old supply and demand” come into play later this year.
“We might see more containers and slightly better rates in Q3 and Q4.
“Going forward…the shipping lines are manufacturing new containers, 20s and 40s, and they’ve put in early investments in larger vessels.”
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