Markets

Pulse Update: Markets steady as planting nears

Liz Wells, April 3, 2024

GIA Thunder was grown commercially for the first time last year and is a popular choice for growers for planting this year.  Photo: PB Seeds

PRICES for chickpeas, faba beans and lentils have moved little since late February, and trading of chickpeas has shifted to new crop as the trade builds a position on hopes that India will remove its tariff after its election concludes in June.

Trade sources report current-crop pulses are trading in modest amounts as grower attention turns to the planting of the winter crop.

Recent rain over much of eastern Australia has buoyed prospects for a timely planting of faba beans, field peas, and lentils from later this month, with chickpeas to follow in the second half of May and into June.

Australia’s lupins for export come predominantly from Western Australia, where growers are gearing up to plant dry ahead of the autumn break expected in coming weeks.

Chickpeas

It appears only one bulk cargo remains to load for Australian current crop in coming weeks, and trading activity is switching to new crop.

In late February, prompt chickpeas delivered to the Darling Downs of southern Queensland were trading at $840-$850/t, and the new-crop market is now trading at close to $900/t.

“New-crop has traded in the past month or so, and some are…buying for India with an option for another destination like Karachi, Bangladesh, or Nepal,” Mandala Trading director Umang Bagaria said.

India’s six-week election period will start on April 19, and as Prime Minister Narendra Modi seeks a third term, his government is not expected to announce any measures that could endanger farmer votes, namely opening the gate to imported chickpeas.

India is now harvesting its rabi crop, which is expected to fall more than 2 million tonnes short of domestic chickpea requirements.

“The government saw that coming, which is why they opened up to yellow pea imports,” Signature Oilseeds Kolkata-based international merchandising executive Sahil Agarwal said.

“There is about 1.3 million tonnes of yellow peas being imported, against the government’s intention to import 300,000-500,000t.

“We have enough to offset the chickpea shortage for the time being, but it is not enough to make things comfortable.”

Mr Agarwal said volume business is being done for Australian chickpeas for shipment from Sep-Oct.

Multiple port options are covering Mundra in north-west India and Jebel Ali in the United Arab Emirates, as well as Karachi and Chittagong.

“We are hearing that India might remove the tariff on imports from Australia.

“As the saying goes: Expect the unexpected; the rumour of India removing the tariff has become so accessible that it has become a piece of dangerous news to bet on.

“If the duty is revoked, prices from Australia will shoot up at least US$100/t, bringing it close to $800 CFR India, which will put the market in disparity again.

“It will be sensible for India to continue importing yellow peas beyond April.”

“If the duty remains in place, prices would come down to US$600 level as it will be hard to sell such a big crop, considering Bangladesh and Karachi will be the main export destinations.”

ABARES is yet to release its new-crop estimates for Australia’s winter pulses, but a chickpea crop of 1Mt seems well and truly possible after recent rain over much of Qld, and 25-50mm or more forecast for Qld and northern New South Wales in coming days.

A very dry season in NSW last year meant the current crop was a small one at 528,000t.

Faba beans

Prices for faba beans delivered bulk port have risen A$5-$10/t in the past month to around $580, a level sufficient to attract sales from growers.

“The market here is firming a bit with continued buying for exports,” Agri-Oz Exports managing director Francois Darcas said.

“Egypt’s sharp devaluation of the Egyptian pound last month…seems to have facilitated the availability of US dollars for importers, creating a bit of new demand.”

While container rates are highly competitive against bulk to South Asia, fears about Houthi attacks in the Red Sea have container vessels bound for northern Egypt rerouting around Africa.

“Rotterdam and Hamburg have now become busy transshipment ports for almost all shipments to the Mediterranean market,” Mr Agarwal said.

“We are not very optimistic about containers flowing into Damietta in the near future.”

The much longer journey adds many days, and considerable cost, to the freight component, and Mr Agarwal said buyers in Egypt therefore needed to be buying months in advance.

“The volume in containers has faded since early March, when an increase in freight of approximately US$30 was announced.”

Bulk shipments of Australian faba beans have slowed, with only one two-port load currently on the stem and loading this and next week, and another cargo pencilled in for June.

“It will be difficult to gather faba beans from the growers in Australia as liquidity in the market is extremely low.”

A handful of growers in southern Qld and northern NSW have already sown faba beans, but most of the Australian crop will be sown in the first half of May in Victoria and South Australia.

ABARES estimates the most recent Australian faba bean harvest yielded 528,000t, and something similar is unofficially expected from the upcoming season.

Lentils

Considerable amounts of lentils remain in grower hands, with truckloads being sold on spikes in the rangebound market.

Exporters are paying around $850/t for Hallmark-type lentils, and bulk activity is coming out of SA ports, primarily to supply India, and fill a hatch or two in cargoes of faba beans heading to Egypt.

“Prices have been pretty stable since harvest, and they’re getting a lot of grower support on the back of relatively lower prices on wheat, barley and canola,” ETG Wimmera-based trader Todd Krahe said.

“There is still plenty to sell.”

Mr Krahe said some growers have uneven quality in lentils stored on farm.

“In the Mallee, it was more because of a late frost, and in the Wimmera, it was more likely to be caused by two or three rains at harvest.”

A rundown in Canada’s current crop stocks is allowing prices for Australian product into India, and secondary destinations including Sri Lanka, to hold ground.

“Canada doesn’t have much of their old crop, but they are starting to sell new crop at equivalent levels.”

Buying interest from Bangladesh is also starting to pick up for the post-Ramadan period.

“Previously there was a gap of about US$30/t between Australian Nipper and Canadian Crimson, which has now been eliminated,” Mr Agarwal said.

“India hasn’t been aggressively importing lentils in the past month.

“The domestic market is in bad shape, with prices being approximately 7 percent below the minimum support price (MSP),” he said of the April 2 market.

“This is not encouraging importers to bid at higher levels, despite the news of the Indian crop being compromised by approximately 500,000t.

“We are expecting a pick-up to come around June when the local crop will be exhausted, as by then it will either be acquired by the government or by the stockists.

“Not many trades have been done for forward months so arrival in ports will also be weak by mid-year.”

On the production front, mostly eastern parts of Victoria’s Mallee and Wimmera regions had 10-20mm of ideally timed rain in recent days.

“Most (growers) are pretty well set up to start planting, and we don’t expect to see any big changes on lentil areas,” Mr Krahe said.

Vic and SA growers are expected to start planting lentils by the end of the month.

ABARES estimates Australia’s current lentil crop at 1.4Mt, and unofficial estimates say the crop about to planted should be able to equal that.

 

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