Markets

Pulse Update: Harvest gathers pace, rain limits grower sales

Liz Wells, October 16, 2020

Bendoc faba beans growing in Victoria’s West Wimmera. Photo: Lewis Bothe

QUEENSLAND’S chickpea harvest is under way amid patchy rain which has growers nervous about overselling tonnage in case the active La Niña weather event causes quality issues and delivery delays.

The sentiment prevails through New South Wales, South Australia and Victoria, where Australia’s volume production of faba beans and lentils occurs, and rain has been more frequent and widespread than in Queensland.

Traders report demand for early shipment pulses has softened, and say they are watching and hoping for signs India will reduce its tariffs on lentils and chickpeas by the time Australia is ready to ship new-crop in bulk.

Bids to growers on chickpeas, faba beans and lentils have softened a little in the past month, and will fall further if supply-side pressure increases and export demand remains limited.

With the container market still suffering some logistics issues, particularly out of Port Botany in Sydney, traders appear to be accumulating for bulk cargoes.

Chickpeas

Australia is forecast to produce more than 700,000t of chickpeas in 2020-21, more than double the drought-reduced tonnages of 2018-19 and 2019-20.

Since India imposed a 30-per-cent tariff on chickpeas in December 2017, and increased it to 40pc in February 2018 to support prices for its domestic crop, Bangladesh and Pakistan have been the volume buyers of Australian chickpeas.

Bangladesh has bought some new-crop containerised chickpeas out of central Queensland already, and is the likely customer for two 10,000t parcels booked out of Mackay in December and January.

This has supported prices paid to growers which have peaked in the past month at $670/t delivered to packers on southern Queensland’s Darling Downs.

The market has this week fallen to around $640/t, down $15-$20/t since late last week as shipment rolls into the November-December slot.

Export Trading Group Australia country manager Shayne Clark said with limited offshore interest at present, prices will sag on supply-side pressure.

“A lot will be determined by what the farmer does,” Mr Clark said.

“If they sell up to 50pc of what they harvest, prices should hold, but if they sell more than that, we’ll see some downside.”

In Queensland and northern NSW, wheat appears to be the commodity growers most want to sell for cash straight off the header as the trade accumulates tonnage for export from next month onward.

“Chickpeas are attractive for growers to sell, but if prices weaken much more, that will probably change.”

Australian Choice Exports managing director James Hunt said Friday saw the peak in the new-crop market to date, and this coincided with more chickpeas hitting the market as harvest had gathered pace in central and southern Queensland.

“There are a lot more sellers this week, and the price has dropped.”

This is against flat demand from Bangladesh and Pakistan.

Uncertainty about prompt availability of food-grade 20-foot containers has limited the trade’s appetite for boxed business, buying for which has generated the price spikes of recent weeks.

“We’ve been boxing chickpeas since the end of September because there’s not enough crop to go out in bulk early.”

“That market’s gone quiet.”

In the past week, some cropping districts in Queensland have had up to 60 millimetres of storm rain, while others have had not a drop.

Good drying weather has followed the rain, and most Queensland growers are back into their harvest programs after a delay of one or two days at most, and no adverse effect on quality.

Faba beans

While a few early crops have been harvested in Queensland and north-west NSW, the vast majority of Australia faba beans are grown in Australia’s south-east, and they are piling on yield thanks to recent rain in the closing weeks of their growing season.

Teague Australia director Tim Teague said this was putting some supply-side pressure on prices already.

“It’s the realisation that we’ll have a big crop, and the lack of demand from Egypt.”

Grain Central understands that only two bulk faba bean cargoes were shipped from south-eastern Australia last year.

With concerns about limited availability of suitable containers at front of mind for some exporters, and surcharges in place from some shipping companies, Mr Teague said bulk was looking increasingly attractive.

“The expectation is we’ll see more bulk more bulk this year for lentils and fabas.

“It’s not just the cheaper cost but also the convenience.”

However, infrastructure and market size means not all destinations will buy bulk.

Prices for faba beans delivered to packers by the end of November on the Darling Downs, into Port Adelaide and in the Victorian Wimmera are sitting at around $400-$415/t.

On the production side, the bean yellow mosaic virus has impacted some crops on the north-west plains of NSW, which is forecast to produce around one third of the NSW total of 60,000t out of a national crop seen by most at 400,000-500,000t.

Lentils

Lentils for delivery to Wimmera packers are trading at around $680/t for Hallmark, Nipper and Nugget types, steady over recent weeks.

Very few old-crop lentils are still in growers’ hands, and little has been forward sold by growers ahead of harvest which will start in earnest next month in north-west Victoria, early areas of South Australia, and NSW.

“The forecast says La Niña will continue to bring rain, and we’re aware what too much of that might do.”

“The lentil market’s flat.”

Traders are hopeful some volume export demand from India will appear as early as December if its rabi (winter) crop is seen by the Indian Government to be too small to exert downward pressure on domestic prices.

To counter strengthening domestic prices, the Indian Government reduced its import tariff on lentils to 11pc from 33pc between early June and 31 July, and reintroduced the lower tariff in mid-September ahead of the next shut-off date on 31 October.

The early window allowed Australia to get roughly 50,000t into India on the reduced tariff, and Canada sold considerably more in both windows in its peak new-crop shipping period.

Australia is on track to produce roughly 350,000t of lentils, up slightly on last year.

Mungbeans

The price outlook for mungbeans remains buoyant, based mainly on solid demand from China and the expectation that India could be a buyer on new-crop in coming months.

Australia’s small spring crop is grown mainly in North Queensland, and harvested November-December.

Indicative prices sit at $1400/t for no. 1 grade, $1300/t for manufacturing and $1200/t for processing.

Most of Australia’s mungbeans are grown over summer and harvested from March to May in southern and central Queensland and northern NSW.

The summer crop appears to be pricing on all grades at around $100/t below the spring crop.

 

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