Markets

Australia looks to Egypt as faba bean harvest starts

Liz Wells, October 2, 2020

Speakers in the Pulses 2.0 Virtual Conference session on faba beans.

HARVEST of Australia’s 2020-21 faba bean crop is under way as exporters look to Egypt to absorb the first large export surplus since 2017.

However, the world’s largest faba market will be weighing up offers from Australia against those on European product, and Mufaddal for Food Industries principal Mufaddal Saifuddin said quality as well as price will be a determining factor.

Speaking at the Global Pulse Confederation’s Pulses 2.0 Virtual Conference on Wednesday, Mr Mufaddal estimated Egypt’s requirement for imported faba beans to be around 450,000 tonnes in the year to 30 September.

He said Australian beans will not always get the business, even when they are US$20-$30 per tonne cheaper than European cargoes.

“A big part of the market likes Baltic and EU beans because they cook faster and they take less fuel to cook.”

Trade sources have had feedback from Egyptian buyers in recent years that Australian beans have inconsistent cooking times, possibly due to comingling of varieties in export parcels.

Containerised Australian new-crop exports of faba beans will start this month out of Brisbane, and bulk shipments from South Australia and possibly Victoria are likely over summer and into autumn.

COVID impact

Tourism plays a big part in Egypt’s economy, and has been hard hit by the cessation of leisure travel caused by COVID-19.

Mr Mufaddal said COVID restrictions in Egypt have reduced the country’s consumption of faba beans used by street vendors.

“We have lost 70,000-80,000 tonnes of consumption during that period.”

Faba beans are a staple in Egypt, but have suffered a drop in consumption during COVID.

He said the closure of schools and construction sites due to COVID has also reduced Egypt’s consumption from its normal levels, and some demand has shifted away from faba beans.

“Egypt did not know how to make falafel from yellow peas and lentils until 2018.

“In Egypt, consumption patterns have changed.”

Providing some hope for increased consumption has been Egypt’s recent lifting of the re-export ban on processed faba beans “under very strict conditions”.

“We have a lot of challenges.”

Egypt consumes all of the faba beans it produces, usually around 150,000t.

Mr Mufaddal has estimated Egypt’s faba bean stocks are sufficient to cover around two months.

Mixed bag in Australia

Agri-Oz Exports Melbourne-based managing director François Darcas said the Australian crop was on track to produce around 520,000t, down from record 2016-17 production of 600,000t.

“In Australia, we are looking at a fairly good year,” Mr Darcas said.

“We’re losing some tonnes in the northern part of the country with a new virus which is wreaking havoc, but it’s fairly localised.”

Countering that are good to excellent conditions in the south, where Mr Darcas said yield potential was climbing thanks to finishing rains and mostly ideal temperatures.

“We are gaining tonnes in New South Wales, Victoria and South Australia.”

Mr Darcas said large crops like the one now being harvested would be selling into a “pretty finite” domestic market, and supply-side pressure could be expected to see prices drift down to feed levels.

“That could be the case with COVID effects.”

Mr Darcas said prices for faba beans had been fairly stable at just under AU$400/t delivered up-country packer in Victoria in recent months, a figure that had failed to excite volume export demand.

“There hasn’t been a big rush from Egypt to buy.”

Behind chickpeas and lupins, faba beans will this year be Australia’s third-biggest pulse crop.

Mr Darcas said faba beans affected by the virus in NSW would not be suitable to export, and stressed that the virus was localised and not affecting crops in the higher-yielding southern areas.

“They will probably have to find a market in Australia.

“Problems in one region are not replicated everywhere.”

Tough seasons for UK, France

Frontier Agriculture trader Andy Bury said varying conditions have made for a “a very extended harvest” in the UK with a whopping range on yield and quality.

“Yield variance goes from less than 1t/ha to not much more than 4-4.5t/ha, when normally we would expect to average 4.5t.

“We’re around 480,000t on total production, but of that, only a very limited amount will be for human consumption.”

Mr Bury said UK prices have risen for fabas for feed. and most crops were of generally poor quality and low yield.

“As ever, other parts of the world usually compensate.”

Across the English Channel, Courtier broker Jean-Louis Lamau said France had suffered a very dry summer and poor yields, and local beans were pricing into France’s feed market.

“The farmers need a lot of feed for cattle, and the price of protein in France…is higher than what Egypt is paying for good-quality beans from Australia and the UK.”

 

Grain Central: Get our free daily cropping news straight to your inbox – Click here

 

 

HAVE YOUR SAY

Your email address will not be published.

Your comment will not appear until it has been moderated.
Contributions that contravene our Comments Policy will not be published.

Comments

  1. norman treloar, December 9, 2021

    If the market in Egypt is depressed as your experts state why have delivered prices in Pt Adelaide increased from $465 to $715 in the last 3 weeks . 715 was at close of business last night and has probably gone higher today .
    Could it be that dry bulk shippers have oversold and are now very short .
    Await you’r considered reply .

  2. Sahil Agarwal, October 2, 2020

    If I’m not wrong, the figure quoted by Mr. Darcas on faba beans should be USD 400 CFR Damietta instead of AUD 400.

    This is to the best of my knowledge, kindly reconfirm. Thanks

    • Liz Wells, October 2, 2020

      Hello Sahil. That AUD price refers to delivery up-country in Australia, and I have just clarified that in the story. I think the USD cfr Damietta price would be less than $400. Can anyone in the trade confirm?

      • Sahil Agarwal, October 4, 2020

        Thanks for the clarification Liz. As per my info, prices for faba beans had witnessed an increase of US$ 7-10.

        Most exporters are citing the surcharges levied by shipping companies as the probable reason for this rise. Demand from middle-eastern countries is still dull and the farmers aren’t selling aggressively just yet. Expecting offers to take a downturn as soon as the logistical congestion is relaxed by late November/early December.

        For regular updates on pluses and oilseeds, please follow Signature Oilseeds on Linkedin and Twitter (@pulses786)

Get Grain Central's news headlines emailed to you -
FREE!