Markets

Pulse Update: Freight shortage stymies new-crop sales

Liz Wells, September 17, 2021

The Rio Blanco set a new record over the weekend with the largest ever evacuation of containers, some 1600 TEU, on a single vessel out of Port Adelaide. Acting as a “sweeper”, the ship is now on its way to Malaysia to deliver a cargo of empty containers from Australia to demand locations in Asia. Photo: Flinders Ports Holdings

A SHORTAGE of bulk and containerised shipping paths for new-crop pulses out of southern Australia is limiting the trade’s ability to show bids to growers.

This is despite global markets being very strong for lentils as a result of Canada’s drought-reduced crop, and reasonable demand for chickpeas and faba beans.

The ongoing shortage of empty containers to pack, compressed turnaround times and limited windows for shipment has fueled increased interest in bulk shipments, and unbooked slots are limited as Australia prepares to export a string of mainly canola and wheat vessels.

Chickpea crops in Central Queensland are thought to be less than 14 days away from the header, and will kick off Australia’s 2021-22 pulse harvest.

Yield prospects for all crops are expected to be good, as evidenced by ABARES lifting its estimates for chickpeas, lentils and lupins in its latest Australian Crop Report released on September 7.

ABARES now estimates new-crop chickpeas at 844,000t, up 15pc from its initial estimate released in June, while lentils are up 8pc to 639,000t.

Largely because of Western Australia’s excellent season, ABARES has lifted its lupin estimate 21pc to 748,000t.

However, ABARES has trimmed 2000t from its forecast for new-crop field peas, now seen at 250,000t.

ABARES does not estimate Australian faba bean production by state, but last week lifted its forecast for the national crop to 442,000t from 249,000ha.

This is down from a record 510,000t grown over 269,000ha in 2020-21, and down also from the 469,000t from 279,000ha initially forecast in June.

TONNES Chickpeas 2020-21 Chickpeas 2021-22 June Chickpeas 2021-22 Sep Lentils 2020-21 Lentils 2021-22 June Lentils 2021-22  Sep
Qld 275,000 370,000 471,000 0 0 1,000
NSW 374,000 316,000 316,000 10,000 8,000 8,000
Vic 68,000 31,000 40,000 306,000 247,000 280,000
SA 11,000 10,000 11,000 300,000 320,000 330,000
WA 5,000 6,000 6,000 18,000 14,000 20,000
National 733,000 733,000 844,000 634,000 589,000 639,000

Table 1: Sep 2021 Australian Crop Report production estimates for chickpeas and lentils showing current crop, and the initial new-crop estimates released June 8 and revised September 7. Source: ABARES

HECTARES Chickpeas 2020-21 Chickpeas 2021-22 June Chickpeas 2021-22 Sep Lentils 2020-21 Lentils 2021-22 June Lentils 2021-22 Sep
Qld 230,000 280,000 310,000 0 0 1,000
NSW 220,000 280,000 280,000 7,000 7,000 7,000
Vic 45,000 33,000 30,000 180,000 190,000 170,000
SA 8,000 10,000 8,000 170,000 200,000 200,000
WA 5,000 5,000 5,000 11,000 12,000 12,000
National 508,000 608,000 633,000 368,000 409,000 390,000

Table 2: Sep 2021 Australian Crop Report area estimates for chickpeas and lentils showing current crop, and the intial new-crop estimates released June 8 and revised September 7. Source: ABARES

TONNES Field peas 2020-21 Field peas 2021-22 June Field peas 2021-22 Sep Lupins 2020-21 Lupins 2021-22 June  Lupins 2021-22 Sep
Qld 0 0 0 0 0 1,000
NSW 61,000 45,000 45,000 130,000 70,000 88,000
Vic 83,000 67,000 55,000 44,000 41,000 39,000
SA 105,000 95,000 90,000 50,000 55,000 45,000
WA 45,000 45,000 60,000 550,000 450,000 575,000
National 294,000 252,000 250,000 774,000 616,000 748,000

Table 3: Sep 2021 Australian Crop Report production estimates for field peas and lupins showing current-crop, and the initial new-crop estimates released June 8 and revised September 7. Source: ABARES

HECTARES Field peas 2020-21 Field peas 2021-22 June Field peas 2021-22 Sep Lupins 2020-21 Lupins 2021-22 June Lupins 2021-22 Sep
Qld 0 0 0 0 0 1,000
NSW 34,000 37,000 37,000 68,000 65,000 68,000
Vic 55,000 61,000 40,000 38,000 40,000 38,000
SA 85,000 90,000 85,000 40,000 50,000 40,000
WA 35,000 30,000 35,000 350,000 300,000 350,000
National 209,000 218,000 197,000 496,000 455,000 497,000

Table 4: Sep 2021 Australian Crop Report area estimates for field peas and lupins showing current-crop, and the initial new-crop estimates released June 8 and revised September 7. Source: ABARES

All prices quoted are AUD unless stated otherwise.

Port proximity evident

Trade sources have told Grain Central container packers located at or near port are jagging more business than those in the heartland of grain-growing areas in the current environment.

“Normally we have a week’s worth of containers on site; some lines are giving us maybe two days with empty containers, so someone who’s only half an hour from the port has an advantage,” one trader said.

“If we’ve only got one rail service per day going to the port, that might give us six hours to fill the container and get it back on the train.”

Traders based up-country are still doing business, but are having to engage fee-for-service container packers at or near ports to help them meet tighter-than-ever shipping schedules.

Just about every speaker addressing last week’s Australian Grains Industry Conference said the shortage of containers was limiting Australia’s ability to service its markets.

Pulse traders, who have traditionally exported a much larger proportion of their sales in containers than cereal traders, are particularly hard hit.

While some markets like Bangladesh, Egypt, India and Sri Lanka are well set up to receive bulk pulses, others like Pakistan and the landlocked Nepal are serviced by containers.

However, some in the trade believe the rise in container freight costs is slowing, and that shipping companies will be able to clear the backlog of full and empty containers sitting in transshipment ports like Singapore and Malaysia’s Port Kelang.

This backlog, along with an undersupply of 20-foot containers in global circulation, is being blamed for boxed Australian pulses being slow and expensive to export to anywhere other than North and South-east Asia.

Traders report one shipping line is suspending services to the Indian sub-continent for the entire fourth quarter as it waits for transshipment backlogs to clear, and only one line is offering a regular service.

Sweepers, vessels which carry only empty containers, are still regular visitors to Australian ports as shipping companies service manufactured exports coming mostly from China, and its call for as many empties to be returned as quickly as possible.

Chickpeas

Trade in delivered-packer markets on the Darling Downs of southern Queensland and in northern New South Wales is deathly quiet because of the shortage of empty containers to pack, and space on vessels sailing to the Indian sub-continent.

Trade in new-crop chickpeas appears to be focused on accumulation for bulk vessels, which are expected to start loading next month.

China’s demand for containerised and bulk Australian sorghum out of Queensland and northern NSW continues to absorb most of the available empty boxes, and bulk slots which can wriggle in among the wheat bookings.

As with last season, Bangladesh is likely to be the first big bulk customer for new-crop chickpeas, and accumulators are bidding for product delivered to CQ ports.

The delivered Downs market is nominally quoted at around $600 per tonne, little changed from last month, and may rally once sorghum exports slow and local chickpeas start to filter into packing plants late next month.

Robinson Grain Toowoomba-based trader Anthony Furse said the action for chickpeas was taking place in bulk.

“You can’t get containers, and we’re starting to see more chickpea vessels on the shipping stem,” Mr Furse said.

Faba beans

The market for faba beans has changed little in the past month, with new-crop delivered port prices at around $390/t.

Demand from Egypt is evident, but the container issue is limiting forward sales from grower to trader, and within the trade.

ETG pulse trader Todd Krahe said interest from Egypt carrying over into new crop was encouraging.

“Australia will probably do a couple of vessels out of SA, and maybe some out of Victoria too.”

Agri-Oz Exports managing director François Darcas said indications from Australia’s two major competitors into Egypt were mixed now that the Northern Hemisphere had advanced.

“The UK crop is up in size — they‘re talking 750,000t — and the Baltic crop seems to be down, and poor quality.”

“Prices are a bit all over the shop due to uncertainty over container freight.”

Faba bean crops are performing well in nearly all growing areas in NSW, South Australia, Victoria and southern Queensland.

The average national yield is forecast at 1.8t/ha, not far off the 1.9t/ha achieved in last year’s record crop.

New variety released

Faba bean variety PBA Ayla has been released this month and is pictured with breeder Dr Kedar Adhikari. Photo: University of Sydney

Australian growers in northern NSW and southern Queensland have a new variety available for next year, FBA Ayla.

Available through Seednet, FBA Ayla was developed through the breeding project which involves the NSW Department of Primary Industries and the University of Adelaide, and is supported by the Grains Research and Development Corporation.

PBA Ayla was bred by Dr Kedar Adhikari from the University of Sydney’s Plant Breeding Institute at Narrabri.

Trials show FBA Ayla has out-yielded all current faba bean varieties by at least 4pc, and it is a suggested replacement for PBA Warda and PBA Nasma.

Lentils

Lentil prices have surged and retreated in the past month, with up-country packer rates rising $200/t in the last half of August to hit $1150/t, but dropping around $100/t in the past two weeks.

Underlying strength in the market is coming from Canada’s smaller crop and India’s reduced tariff, and Mr Krahe said these factors have not been able to counter the impact of huge freight costs and uncertainty.

“Now that shipping lines have voiced their concerns about fourth-quarter shipment, the price has fallen.

“The market is remaining fairly firm, but the appetite from the trade is starting to wane because we can’t ship it.”

Mr Krahe said prices in the past month have encouraged a run of grower selling.

“Once we get above $1000/t, growers are very keen to sell.

“We’re seeing more inquiry now that the prices have softened, but we’ve run out of shipping space.

“Normally we’d be selling out into January by now, with October, November and December fully booked up, given the crop looks good.

“Right now, we’ve sold a quarter of October, and nothing beyond that.”

Mr Krahe said demand from India for lentils was modest at present, but may pick up in the next month or so once the full impact of drought on Canada’s export surplus becomes evident.

Victoria and South Australia grow the vast majority of Australia’s lentils, and despite some dry patches, both are expected to produce a big and good-quality crop provided frost or excessive rain do not hinder late growth.

Mungbeans

Indicative new-crop prices for mungbeans are steady, with No. 1 grade at around $1200/t delivered Downs packer, $1100/t for processing grade, and $1000/t for manufacturing.

As with the current shipping year, China looks like being the major destinations for new crop, which could be a big one.

Australian Choice Exports managing director James Hunt said the very high cost of fertiliser could see some sorghum area drift into mungbeans, particularly in NSW.

“NSW is probably a candidate for a larger crop than usual because of the savings on fertiliser growers can make by planting mungbeans instead of sorghum,” Mr Hunt said.

Coupled with ample soil moisture in parts of NSW, it means the state looks set to plant its first spring crop in years, and a summer crop too if the season shapes up.

Mr Hunt said growers were watching the positive market signals, and were ready to respond now that manufacturing grade was holding steady at $1000/t or more.

“The overseas market looks good, and conditions here, plus the Indian market opening up, mean we might be in for a big one.”

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  1. Peter Hogan, September 18, 2021

    I believe that if an Aust. Exporter offered 5 to 10,000 tonne of pulses packed in 1.2 tonne bulker bags, loaded break bulk, Aust port, there would be overseas buyers. Plenty of importers can’t take bulk grain, but with a bulker bag lifting frame they could use existing cranes, trucks and warehouses to take the load. The 20 to 24 bulk bag lifting frames would be easily made here and used to load the vessel, the frames would be sold to the importer and sent with the shipment. I believe it would be an eminently achievable shipment option. Peter Hogan, Howlong, NSW.

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