Markets

Pulse Update: Global demand turns to Northern Hemisphere

Liz Wells, July 15, 2020

Most of Australia’s winter-grown pulses like this faba bean crop in Victoria’s west Wimmera region are looking at average or better yields. Photo: Jason Brand, Southern Pulse Agronomy Program

TRADING of current-crop and new-crop Australian pulses has slowed markedly in the past month as export markets look to Northern Hemisphere crops for near-term supply.

Thin demand means bids for chickpeas, faba beans and lentils have softened by $40-$100 per tonne, and the mungbean trade has all but stopped with the recently harvested crop now just about sold out.

Chickpeas

Old-crop and current-crop chickpeas are nominally quoted at around $700/t delivered Darling Downs packer, at the higher end of where values were last month, while the new-crop market has dropped around $40-$50/t to $560/t.

Export Trading Group Australia country manager Shayne Clark said the market lacked liquidity for both old and new crop desi chickpeas.

Farmer-to-trader and trader-to-trader business was slow.

“We’re seeing limited new-crop bids from Pakistan, and Bangladesh has not entered the market,” Mr Clark said.

“The big question is India, and at this stage we don’t see expect to see this market reopening unless their monsoon is very poor.”

Mr Clark said Bangladesh and Pakistan, plus support from the Middle East, again looked like being the major markets for new-crop chickpeas.

Australia’s chickpea harvest starts in Central Queensland in late October, and the region could supply up to 100,000t for export in bulk, with Bangladesh the likely buyer.
“Bangladesh likes Australian quality…but India is a new supplier to that market, and they can also purchase chickpeas from Myanmar.

“It is purely price driven.

“To the best of my knowledge, no new-crop bulk cargo has been traded because Bangladesh is yet to enter the market.

“Pakistan has been buying fluctuating volumes of Australian chickpeas.”

Tanzanian desis will be available from next month onward.

“Pakistan will also purchase Black Sea kabulis and desis to blend if Australian prices increase.”

ABARES last month released its initial forecast for the crop now in the ground at 531,000 hectares, just over double last year’s area, and tonnage at 662,000t, well over double what last year’s harvest yielded.

That number includes kabuli as well as desi chickpeas.

Better subsoil than topsoil moisture in the back half of Queensland’s winter-crop planting window is thought to have pushed some extra area intended for cereals into desis, giving production estimates more upside than downside.

Faba beans

Agri-Oz Exports managing director Francois Darcas said markets were “extremely quiet” on all pulses as was often seen at this time of year, when stocks in Australia ran low, and offers were comparatively unattractive to export customers ahead of the new-crop inverse.

“We tend to be expensive against new-crop offers from Europe.”

Baltic States and the United Kingdom harvest most of their faba beans in September-October, and their crops later stages has absorbed what little global buying interest there is.

Egypt is the world’s biggest faba bean importer by far, and is currently out of the market.

“Egypt is maybe 70pc of our market, and they have pretty much shut down with COVID reducing demand.”

Also, the Egyptian Government has banned re-exports or processed faba beans, a market which accounts for around 10-20pc of the country’s total demand.

“Egypt has had a pretty good local crop, and that is flooding the local market.

“I don’t think in Australia anyone is trying hard to buy faba beans.

“It’s more of a waiting game now.”

Mr Darcas said a few pockets of the Australian crop, mainly in Queensland and Western Australia, could do with rain, but crops in the main production areas of New South Wales, South Australia and Victoria were doing very well.

A number of up-country container packers have withdrawn their bids to growers and brokers on current-crop, and those that remain are in the low $500s/t, $10-$20/t down on last month’s market.

New-crop faba beans delivered packer are bid at around $430/t, at $50-$80/t down from last month.

A hiccup in northern hemisphere quality, or lower-than-expected yields, could swing attention to the Australian crop.

“The Baltic crop looks at best the same size as last year, and the UK had a wet autumn and early winter, and then a dry spring and early summer, so it may be smaller than last year.”

Lentils

Australian exporters earlier this month finished a flurry of activity brought on by the Indian Government dropping its lentil tariff from 30pc to 10pc, valid only for lentils which arrived prior to 31 August.

“It’s a high-risk proposal now if the shipment were to be delayed, and it’s not like we have mountains to sell anyway,” Mr Darcas said.

Victorian up-country packers are paying $710-$720/t for Nippers in the prompt market, down $50-$100/t on last month’s values, while new-crop values have also softened to $650/t from $650-$700/t last month.

“Crop conditions are good and there is now reason to chase new-crop.

“We still need a good spring, but area is up a bit because of barley area being down, and crops in the northern hemisphere are in good shape.”

Canada’s lentil harvest will start later this month and get going in earnest in August.

“Importing countries will be looking at Canada and US new-crop before they will look at ours.”

Mungbeans

Australia’s mungbean harvest has now all but finished, with the top end of production now seen at 60,000t for northern NSW and southern and central Queensland, down slightly from earlier expectations due to a dry finish in most growing areas.

China has been the biggest market by far for Australian mungbeans, with support also seen from Indonesia, Vietnam and North America.

This year’s Australian mungbean harvest will be remembered for its extremely high quality, which saw a larger-than-normal tonnage go into the premium No. 1 grade.

Most loads made the middle processing grade, and minimal amounts went into the lowest-paying manufacturing category.

Bids for processing-grade mungbeans are now sitting at a nominal $1300/t delivered Downs packer, at the lower end of the numbers shown to growers during harvest.

Woods Grain trader Steve Foran said only a small tonnage of mungbeans was left to be sold.

“Growers saw historically high prices offered to them, so they jammed them out into the market as fast as they could.

“There are a few late crops around, but just about everything’s been sold and the quality this year has been excellent.”

 

 

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