Markets

Pulse Update: Prices steady, demand strong

Liz Wells, March 19, 2021

Winston inspects a crop of Opal mungbeans at Dulacca on Queensland’s Western Downs which will get a boost from recent rain. Photo: Stephen Gibson

PRICES for Australia’s major pulses have held ground in the past month as bulk shipments continue apace, and prospects for solid demand continue into the second half of 2021.

The cost of container freight remains prohibitively high to some destinations in the Middle East and South Asia, and has pushed a higher-than-normal percentage of chickpea, faba bean and lentil exports into the bulk market.

Combination cargoes of pulses, or pulses and cereals, are helping to carry Australia’s 2020-21 crop to its offshore customers.

On the production front, most of Australia’s mungbean-growing areas in New South Wales and Queensland have had 30-100 millimetres of rain in recent days, and more in places.

A further 25-50mm, and up to 100mm in northern NSW, is forecast for all pulse-growing areas of Victoria, NSW and Queensland into next week.

The falls have boosted yield prospects for many mungbean crops ahead of the peak harvest period in April-May, and are helping to set up prospects for the upcoming winter-crop plant of chickpeas, faba beans and lentils.

Chickpeas

Demand driven primarily by Bangladesh and Pakistan has sustained prices at around $660-$670/t delivered Downs packer.

The big news in the market has been the discharge this month of Australia’s first bulk cargo to Pakistan in around 10 years.

Pakistan is a regular buyer of containerised Australian chickpeas, and its peak figure of recent years is believed to be 37,759t in December 2020, the biggest volume seen since 34,805t in April 2018.

The February 2021 export figure could well be above that to reflect containerised exports as well as the 25,000t of bulk to Pakistan, and further bulk sales to Bangladesh.

Buying for both markets has been supportive of prices as stocks build ahead of Ramadan which starts mid-April.

Bangladesh has been the biggest-volume buyer of bulk chickpeas shipped out of Queensland.

Australian Choice Exports managing director James Hunt said the direction for prices would be determined by where stocks ended up post Ramadan.

“That’s when the big consumption takes place, and it all depends on what the market does on the other side of that.”

Brisbane ports and possibly Newcastle could export some bulk chickpeas in coming months.

Mr Hunt said difficulties in exporting large numbers of containers out of Sydney, and possibly Brisbane as new-crop sorghum and mungbeans enter the supply chain, could switch more business into bulk.

“A lot of the buyers don’t want bulk, but with the price difference being considerable, they might decide to take it.

“There’s nothing much volume-wise from Central Queensland, and southern Queensland’s crop wasn’t that big.

“Most of the chickpeas are in NSW, and it’s a nightmare to go in containers through Sydney.

“That leaves us with Brisbane and maybe Newcastle.”

AgVantage Commodities managing director Steve Dalton said prices were holding up despite a reduced number of market participants.

“Some of the regulars we normally see in the container trade for chickpeas aren’t there this year.”

Faba beans

Prices for faba beans have held firmed to around $350/t delivered port, in line with the top of the market seen last month.

The market is being supported by accumulators of bulk cargoes for export, mainly to Egypt, and also the domestic stockfeed market, which is using as many fabas as possible in its rations.

“Domestically, beans are the cheapest protein around, so there’s not too much downside,” Teague Australia Tim Teague said

“There have been plenty of vessels going out too, and it’s mainly a bulk market.

“Bulk freight rates are a bit cheaper than containers, and more convenient for a lot of customers.”

“Containers are more heartache than they’re worth at the moment, and there’s the volume around this year to do bulk.”

Lithuania is said to be Australia’s biggest competitor into Egypt at present, but Australian quality and volume are helping its sales tick over.

The execution of combination cargoes involving wheat and/lentils is also boosting demand for Australia product.

Melaluka Trading director Mick Fitzgerald said growers had not been aggressive sellers because they wanted to have adequate reserves to feed to their own livestock, or to sell to the grazier market if conditions turned dry.

“If we get a late break in the season and things turn dry in autumn, the cockies will soak a few up.

“For stockfeed, they’re the cheapest form of protein around.”

Lentils

Lentils are trading at around $670-$680/t delivered Wimmera packer, and up to $700/t in places, little changed from last month.

ETG trader Todd Krahe said the market has been reasonable stable in recent weeks.

“Most of the demand we’re seeing is for containers for later shipments for June-July and even out to August,” Mr Krahe said.

“The buying interest is coming from traders looking for India and Pakistan, and this indicates the market should remain firm.”

Rumours are starting to circulate in the market that India could halve its tariff on lentils from the current 33 per cent, and this would help to stimulate demand and reduce Australian stocks ahead of new-crop which will become available in December.

“There is some grower selling but a lot of it is trade-based, and reselling positions they’ve got.”

Mr Krahe said grower targets were targetting prices of around $700/t delivered packer for Nipper and Nugget types, and were selling into spikes in the market.

As usual, Canada and Australia are going head to head into the South Asia market, and both have good stocks.

Mr Krahe said lentil exporters were also battling a limited supply of empty containers and available space on vessels.

“We’re managing, but shipping is still our biggest challenge.”

Exporters say rates for 20-foot containers to South Asia have doubled since COVID hit early last year as shipping lines focus on servicing China, where demand for empties is centred.

“As a result, we’ve seen more pulses go in bulk vessels out of South Australia and Victoria than normal, and some traders are doing bulk instead of containers.”

Mungbeans

Prices for mungbeans are unchanged from last month at around $1300/t for No. 1 grade, $1200/t for processing and $1100/t for manufacturing.

Mr Hunt said the first crops of the southern Queensland harvest are starting to trickle into container packers on the Downs, and later ones are benefitting from rain in the past week.

“Downs was in desperate need of rain and some corps didn’t make it; they got sprayed out or ploughed out.”

Mr Hunt said this week’s rain has come in time to be a considerable help to later crops which will start to make their way to Downs packers in mid-April.

“This rain will make harvest a bit later than it otherwise would have been, but in general it’s pretty good all round for the crop.”

Most of the mungbeans booked for shipment from April onward are bound for China.

While empty boxes ex Brisbane are not easy to get on the Downs, they appear to be more readily available than those coming out of southern ports.

Also, they are being booked on the China route, where vessel space is more readily available than to South Asia.

“If our harvest is a bit late, the shipping companies are happy to roll into later on in April.

“We might have more boxes by then.”

 

 

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