Markets

Pulse Update: Lentils rally on India hopes

Liz Wells, April 19, 2021

Imtrade NSW sales manager Ardina Jackson inspects a crop of mungbeans at Wallangra north of Inverell. Photo: Nerissa Jackson, Imtrade

AUSTRALIAN lentil prices have risen by up to $50 per tonne over the past month on hopes that India will again reduce its tariff to bolster local supplies.

While Australia’s faba bean market remains flat, chickpea prices have firmed ahead of the Ramadan period which has quietened demand from Bangladesh and Pakistan.

Mungbean prices have eased as the harvest of early crops in northern New South Wales gets under way and market attention turns to execution rather than accumulation.

Trade sources report containers remain problematic and expensive due to ongoing supply-chain issues in Australia and globally, and bulk cargoes are shifting a greater-than-normal amount of chickpeas, faba beans and lentils.

Container business remains most problematic out of Adelaide and Sydney.

In Adelaide, there is limited availability of empties and a small number of vessels to book full ones on to, while in Sydney, landside and shipping issues are equally challenging.

Planting of Australia’s winter pulses started last week, and chickpeas in Central Queensland and faba beans in NSW are now going into the ground.

In northern regions, the annual mungbean harvest has just started.

All prices quoted are AUD.

Chickpeas

The month of Ramadan started last week, and traders report its arrival has quietened export demand from Bangladesh and Pakistan.

Demand driven primarily by both nations has firmed the market by a few dollars in the past month to around $670/t delivered Darling Downs packer, and $650/t in northern NSW.

Mandala Trading director Umang Bagaria said the chickpea market had firmed in the past month, mainly on demand from Pakistan.

“They have bought for future months because they’ve had a pretty bad crop in Pakistan especially,” Mr Bagaria said.

“There has been some good support from farmers selling at these prices.”

AGT Foods Australia Toowoomba-based merchant Mitchell Elks said export demand for chickpeas weakened last week with Ramadan’s arrival, but prices can be expected to kick in coming months.

“Chickpeas probably have a slightly bullish tone before our new-crop arrives, given the big amount of exports we’ve seen,” Mr Elks said.

“If we go out three or four months, things look good for chickpea prices on a limited supply out of Australia.”

However, Mr Elks and others believe new-crop Australian chickpeas could create their own supply-side pressure from October onward.

Australian Bureau of Statistics (ABS) data shows Australia has exported 480,505t of chickpeas between October 1 and February 28.

At least another 150,000t is likely to be shipped, mostly in containers, in total in March-April, with smaller tonnages expected to be shipped in subsequent months.

Mr Elks said chickpea bids to growers and traders had been high enough to encourage selling rather than storing in most cases, and carry-out into new crop was likely to be limited.

“The majority of tonnes we’re seeing are still coming from growers and not from the trade.

“We’d be expecting to carry out 50,000-100,000t.”

ABARES forecast for Australia’s current chickpea crop is seen at 755,000t, while Pulse Australia (PA) forecasts 802,000t.

Good to excellent rain has fallen across nearly all of Australia’s main chickpea-growing areas, from northern NSW to Central Queensland, and topped up subsoil moisture ahead of planting.

“We’re seeing some really good conditions for growers now in northern NSW and southern Queensland, and chickpea planting is three to four weeks away from starting.”

Faba beans

Prices for faba beans have risen by $10-$20/t on a delivered-port basis in the past month to around $360-$370/t, while up-country packers are paying more like $330-$335/t.

ABARES estimates for Australia’s current crop of faba beans is 510,000t, while PA forecasts 448,000t.

Industry estimates put bulk exports to date at around 175,000t.

When containers are added, more like 250,000t is thought to have been shipped.

Australia’s domestic stockfeed millers are continuing to price as many faba beans as they can into their stockfeed rations.

They are seen as excellent value for ruminant, monogastric and aquafeed rations, and this time last year were trading at more than $700/t into the dying months of the drought-driven market.

News last week that Bunge has bought a stake in Australian Pulse Proteins  means this processor could double its consumption of faba beans to 40,000t per annum from next year.

APP is already positioned to be Australia’s biggest buyer of pulses for the human-consumption market.

On the export front, Egypt is unarguably the world’s biggest faba bean market.

It has been buying full- and part-cargoes of fabas, mostly out of South Australia.

“It does not look like there are more in the pipeline, but you never know until it happens,” Agri-Oz Exports general manager François Darcas said.

From September on, Australian faba beans are expected to face heady competition from European new crop.

Conditions in South Australia remain dry in grazing areas north of the Murray-Mallee in South Australia.

SA growers with unsold tonnage are therefore hanging on to fabas in case they need to feed them to their own livestock, or to sell to supplementary feeders or stockfeed millers.

Faba bean area on the north-west plains of NSW is expected to drop markedly this year in the wake of a poor crop last year caused by one or two viruses which greatly reduced yield and caused widespread downgrading.

Good rain has already fallen over much of Australia’s faba-growing area, which sweeps from Queensland to South Australia.

“We’re thinking because the price is down, there won’t be as many planted as there were last year,” PA southern region industry development manager Phil Bowden said.

Lentils

Lentils delivered to up-country container packers are trading at $730/t in South Australia and $710-$715/t in Victoria, and up to $740-$750/t for the smaller Nipper types.

“That’s up $30/t in two weeks; there seems to be a lot of gambling on India at the moment,” Mr Bagaria said.

In the closing months of 2020, the Indian Government twice dropped its tariff on lentils to 10 per cent from 30pc to help shore up supplies from a smaller-than-expected crop.

The market is abuzz with talk that another drop is imminent. Mr Bagaria said a price differential had emerged for the eastern Calcutta market versus the price for Nhava Sheva, Mumbai’s port.

Mr Bagaria said Nipper varieties were trading at a $10-$15/t premium to the larger Nugget types.

“The Calcutta market wants Nippers, and Nhava Sheva wants more Nuggets.”

However, Bangladesh remains the volume buyer of Australian lentils from the current crop.

ABS data shows Australia has exported 379,132t of lentils between October 1 and February 28.

ABARES has estimated the current crop at 634,000t, compared with PA’s 565,000t.

SA has exported much of the bulk volume to date.

Mr Elks said accumulation for bulk cargoes had gotten difficult.

“Tonnes are getting skinny on the supply side.

“There aren’t a whole lot left in SA; Victoria might be a different story.”

Mungbeans

Prices for mungbeans have eased by up to $50/t in the past month, with No. 1 grade now at $1250/t, processing at $1150/t and manufacturing at $1050/t, all delivered packer.

Most of Australia’s mungbeans are exported out of Brisbane, which has a better flow of containers than southern ports.

China is the main destination for Australian mungbeans, and the business is being helped by the global container trade’s continued push to reposition empty boxes into China.

Trade sources report northern NSW’s earliest mungbean crops are now being harvested, while the Darling Downs harvest is still a few weeks away, and the CQ one is beyond that.

Very little new business is being done as the market shifts attention to execution.

 

 

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