WITH decent (albeit patchy) rain around in Queensland and northern NSW over the past few weeks, focus has turned to the winter crop planting program.
After a successful 2016 harvest, chickpeas are certainly featuring heavily in many growers’ plans with most pundits suggesting that chickpea planting intentions are similar to last year.
Despite all the concerns with regard to excessive rain in September and October last year, yields and hence the final 2016 crop size, has surprised all. While it is still difficult to accurately pinpoint, it is now becoming evident that Australian production last season was close to 2.0 million tonnes (Mt) – a clear national record.
At the same time, demand from the subcontinent has continued longer than usual. Total exports to the end of March are expected to reach around 1.5Mt.
While we still have some export work to do, it appears ‘regular’ demand should comfortably deal with any remaining surplus, leaving the domestic cupboard pretty bare come new crop harvest.
Continued Indian demand predicates sustenance of buoyant prices in this high production environment. Around 70 per cent (more than 1.0Mt) of the exports to the end of March will be to India.
Nonetheless, India needs to be a strong importer once again this coming season given the Aussie grower’s affinity with chickpeas.
That said, India’s growth in pulse demand continues to substantially outstrip local production, despite government market intervention.
India has had two years of poor production leading up to this year’s harvest.
This has led to a significant shortfall in supply and strong imports, especially from Australia.
However, the ‘supply pipeline’ in India is completely dry, meaning they remain vulnerable to any further hiccups in local production.
So what are the prospects for the current Indian chickpea harvest? Reports to date suggest it is 20-30pc better than last year, which sounds good.
In reality, last year’s crop was so poor that even a 30pc increase will mean that their crop is still well below the long-term average and certainly not substantial enough to rebuild stocks.
Accordingly, expectations are now strong that we will see India importing strongly again this coming season. Maybe not as much as the current season, but substantial just the same. Whether they import to satisfy nearby demand or to rebuild stocks will not only depend on the size of this year’s harvest, but more importantly, next year’s harvest, certainty around which will not be known until the retreating monsoon wanes on cusp of the Australian harvest.
Like India, Pakistan has had two years of poor production. This year’s crop is unlikely to exceed 300,000t, less than 50pc of their domestic demand of 600-650,000t, leaving an import requirement of more than 300,000t.
The Pakistan market lacks the sophistication and financial stability of the India market – as strange as that may seem.
Imports for the first quarter of 2017 have been far greater than nearby demand, resulting in significant stocks sitting on the wharf, unable to find prompt homes.
Some of the importers of these stocks are unable to finance this unsold inventory, forcing them back into the market wanting to washout or cancel contracts.
This has caused a sharp fall in nearby values in Pakistan and an easing of values here in Australia.
The irony is that eventually they will need the product, but not now, and like India, they are expected to be a regular importer again once new crop stocks are available.
Whilst we still have a long way to travel, it would appear Australia is on track for another good crop, weather dependant of course.
Indian demand is critical and is expected to continue into the next Australian crop.
However, it is the extent of that demand that will be the primary driver of domestic new crop values.