Markets

Pulse Update: Bulk demand buoys lentils, fabas

Liz Wells, March 16, 2022

A crop of mungbeans growing on the slopes of far northern NSW.

EXPORT demand for bulk lentils and faba beans is supporting values for both pulses this month, while the chickpea market remains in the doldrums.

Harvest of what is expected to be a record mungbean crop is well under way, and prices for this container-only market are holding up in the face of competition from Myanmar’s new crop.

Meanwhile, the global pulse market is processing the impact of Russia’s invasion of Ukraine and what it means for S&Ds.

Both Russia and Ukraine normally export field peas to Europe as well as the Middle East, North African and South Asia, and disruptions to rail movements and Black Sea shipping are expected to impact new-crop sales.

All prices quoted refer to Australian dollars per tonne unless stated otherwise.

Chickpeas

Bids from Darling Downs container packers have sagged to just below $500 per tonne, down at least $10/t on last month, and trade remains extremely thin.

Exporting chickpeas out of New South Wales and southern Queensland remains problematic on the prevailing lack of affordable and reliable paths for containers going to South Asia.

“The supply chain is the first issue,” Agvantage Commodities principal Steve Dalton said.

While some container packers are dealing with chickpeas, Mr Dalton said many have shunned the north’s volume pulse this season to concentrate on commodities like sorghum, wheat and mungbeans that are bound for China and South-east Asia.

“They know containers are difficult, and they want to stick with product with there’s more volume.”

Mr Dalton said the rain-affected portion of the crop has not found volume demand in the lead-up to Ramadan, when chickpeas in Bangladesh are eating whole during the festival which will start this year in early April.

“We have potential for splitting for chana dahl, and flour after that.

“We just haven’t seen demand come for that product yet, and that’s a timing issue around Ramadan.”

Around 45,000t of good-quality bulk chickpeas harvested in ideal conditions is booked to load in Central Queensland by the end of April.

A stockfeed market for chickpeas is shaping up in northern NSW and southern Queensland, with piggeries the main customers.

Rain-affected chickpeas with a maximum 10pc mould and 15pc defective grain are trading at around $350/t on farm, and loads which fail those specs are trading at a maximum $250/t as they require grading to capture

Faba beans

Export demand has lifted prices for faba beans by $30-$40/t in the past month to around $490-$500/t.

While Ukraine and Russia are not big exporters of faba beans, the MENA food-security issue brought about by the conflict has some nations looking to origins like Australia as a reliable option.

“Egypt is showing interest again, because they might have to not rely on the Northern Hemisphere crop as much as they normally would,” ETG southern pulse trader Todd Krahe said.

Several full or part cargoes of faba beans are booked to load in Victoria and South Australia over coming weeks, and Lachstock Consulting is reporting 25,000t bound for Egypt is to load in Brisbane next week.

Field pea prices are sitting around $580-$600/t delivered port, and fabas are therefore still in favour in domestic feedmill rations.

Lentils

Prices for lentils delivered Wimmera packer are steady on the month at around $900/t, with up to $920/t being paid for preferred varieties.

However, the bulk market is where the action is as containers remain prohibitively expensive and hard to procure for passage to South Asia.

“Bulk is all that’s keeping the lentil market afloat; container availability is probably the worst it’s been in the past 18 months,” Mr Krahe said.

Lentils being delivered by growers to up-country packing sites, including ETG’s Wimpak facility at Minyip in Victoria’s Wimmera district are mostly going into bulk exports

“A lot of container-packing sites have turned into accumulation sites for bulk shipments.

“We’re only doing probably 25pc of the containers we’d normally be doing.”

Victoria has three bulk grain export terminals, and they are focussing on canola, wheat and barley in the current shipping year.

It means vessels carrying up to 25,000t and more in some cases are relying on road only to bring in lentils and faba beans.

However, Viterra in South Australia does handle lentils coming in by road and rail for its own and third-party cargoes loading at its bulk terminals.

SA is expected to ship the vast majority of the 160,000t plus of lentils booked to load over March-April, with Bangladesh, Egypt and India the major customers.

As world markets for cereals and oilseeds rally on the back of the war being waged on Ukraine, Mr Krahe said growers were keen to see new price targets hit before they let go of more lentils.

“Everyone wanted a phone call when the market got to $900, and then they wanted a bit more.”

“The conflict over in Europe is having an impact.”

Mungbeans

Prices for mungbeans delivered up-country packer have held steady over the past month at roughly $1200/t for No. 1 grade, $1100/t for processing and $1000/t for manufacturing.

While recent rain in south-east Queensland and north-east NSW caused significant flooding, beneficial falls were recorded in many mungbean-growing areas.

Bean Growers Australia CEO and export manager Lloyd Neilsen said recent rain by and large has helped to underpin yield potential in the lead-up to harvest which will hit its straps in the last half of April.

“This rains delayed some of the crops, and without it, we would have seen some harvest activity by now,” Mr Neilsen said.

While rain on last year’s crop fell too late to do little more than impact quality for most, the current crop appears to be thriving.

“This year’s crops look fantastic.”

On the export front, Chinese demand remains the main game.

“Vietnam has been very slow, but they’re starting to come back with better bids.”

Both markets are quoted at around US$950/t cost and freight (cfr) for manufacturing grade, which is believed to be competitive with new-crop coming out of Myanmar.

Australian mungbeans are exported primarily out of Brisbane, and flooding in the Brisbane River earlier this month caused some vessels to have to bypass the port, and delayed loading of others.

However, sources have said the delays have been workable, and the flow to export has now returned to normal.

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