Markets

Prospects bright for Australian faba bean crop

Liz Wells, June 21, 2019

PRICE prospects for Australia’s faba bean crop now in the ground are looking good based on demand from the world’s biggest importer, Egypt, and domestic appeal as a stockfeed of choice, with the crop off to a solid start in key producing areas.

In its latest crop forecast issued 14 June, Pulse Australia said sustained domestic demand for feed, coupled with a global shortage of faba beans, had ensured prices remained above the long-term average.

Consequently, the area planted to faba beans has lifted from last season, with beans in many cases replacing some lentils in rotations in Victoria and South Australia.

Despite dry conditions in central and northern New South Wales limiting faba bean plantings, the 2019 area has lifted from last year to closer to the long-term average of roughly 200,000 hectares.

 

State 2018 final June 2019
estimate
Harvested area Production Planted area Production
QLD 2,000 2,000 3,000 3,000
NSW 22,000 19,000 20,000 27,000
VIC 63,000 63,000 80,000 119,000
SA 71,000 108,000 84,000 139,000
WA 6,000 6,000 4000, 3,000
Australia
182,000 198,000 191,000 291,000

Table 1: Pulse Australia estimates for hectares and tonnage.

Strong prices

Australian Grain Export international pulse trader Will Alexander said faba bean area was well up in South Australia and Victoria, with record high prices feeding into growers’ planting intentions.

“Prices got up to $1000 per tonne, even $1100/t, and now they’re back down to over $500/t for November.

“Three or four months ago, the market went crazy, and now it’s all going the other way and the price is falling.

“We’re on the other side of the wheel now, and where prices go depends on the European crop.”

It is harvested up to September, when the latest crops are harvested in the Baltic region.

Australia is the world’s biggest faba bean exporter, holding around one-third of the global market, with the United Kingdom the next biggest with 20 per cent of world custom.

Egypt is the biggest importer by far, and buys 45-50pc of the world’s imports, followed by Norway on 8pc and Sudan on 6pc.

A presentation to the Global Pulse Confederation Pulses19 conference held in Rio de Janeiro last week said France had been a sizeable exporter market, but in recent years was consuming more faba beans domestically for animal feed.

Newer entrants to the export market include Lithuania, Latvia and Estonia, which has taken over some of the export business previously executed by France, but poor yields in 2018 due to dry conditions saw area for the 2019 crop cut by 10pc.

While Egypt is a larger producer and exporter, it still needs to import most of the beans it consumes, and its production has dropped dramatically since the 1990s.

COUNTRY 2017 2018 2019
China 1,803,000 1,800,000 1,640,000
Ethiopia 878,000 921,000 960,000
Australia 374,000 240,000 340,000
U.K. 700,000 375,000 550,000
France 230,000 160,000 192,000
Germany 189,000 161,800 190,000
Egypt 128,000 150,000 170,000
Canada 99,800 91,300 116,500
Sudan 110,719 85,000 105,000

Table 2: World’s largest faba-bean producers with figures in tonnes. Source: Judd Keller, Kelley Bean Company and US Dry Bean Council.

Mr Alexander said Egypt could re-enter the market at any time, and was showing interest in new-crop Australian faba beans, which can be shipped from November onward.

Pulse Australia southern-region industry development manager Phil Bowden said strong faba bean prices had seen the pulse displace some canola area.

“The price has been fantastic for the past six to 12 months at up around $900-$1000/t or more, a record, and that was because Europe including Ukraine normally has big crops and they didn’t last year,” he said.

“Also, Ramadan was early this year, and there was huge demand to get faba beans imported for that.”

Domestically, Mr Bowden said feedmills supplying the aquaculture market were most likely to pay up for faba beans at current levels at or above $500/t.

“They can use lupins, but they love fabas because they won’t hit the bottom of the ocean as quickly as lupins.”

Mr Alexander said the resurgence of a NSW drought market could also be supportive of prices.

Because of their suitability as a high-protein feed for sheep, faba beans were in strong demand in NSW last year as graziers looked to provide supplementary feed during a drought-stricken period.

Varying seasons

Mr Bowden said much of the area intended for faba beans north and west of Cowra in central NSW did not get planted due to dry conditions.

However, some crops on the NSW slopes as far north as the Queensland border, and also on the Liverpool Plains, were said to be in good stead.

“Along the Murray River in NSW and into Victoria, as well as from the south-east of South Australia into the Mid North, crops are looking good.”

Faba beans have an average yield of around 1.5-2t/ha, and $250-$300/t is seen as an average on-farm price.

“It went down to $180 a few years ago, when France and Ukraine had big crops too and there wasn’t much demand from Egypt.

“Last year, prices started at $300/t and got up to $1000/t, and where they are at the moment is still pretty good.”

Hectares Tonnes
2017-18 313,000 416,000
2018-19 178,000 217,000
2019-20 227,000 326,000

Table 3: ABARES Australian faba-bean area and production estimates.

 

 

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. Karim Asaad, June 22, 2019

    Thanks for the report. EU origins would have fair beans crop yields. July would give a clear view for UK and Baltic all over production.

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