Markets

Pulse Update: Prompt chickpeas, lentils bring premium

Liz Wells, September 16, 2020

A crop of PBA Highland lentils at Younghusband in South Australia’s Murray-Mallee district. Photo: Sean Matthewson, Dodgshun Medlin

HARVEST of Australia’s winter pulses has started this month with early crops of chickpeas in Central Queensland (CQ), which are fetching a premium for prompt shipment to Bangladesh.

Lentils for prompt shipment are also in demand from Pakistan amid limited current-crop supplies, and are trading above new-crop values.

Problems in the container supply chain could limit early boxed exports of chickpeas and faba beans, the first pulses out of Queensland and northern New South Wales, for the opening weeks of their shipment period.

However, shipments out of Melbourne and Adelaide appear unlikely to be affected, and those from Sydney and Brisbane are expected to find a rhythm in November once new-crop exports help restore the flow of boxes in and out of ports.

ABARES lifted its estimates for all five of Australia’s major pulse crops last week, and Pulse Australia sees even bigger numbers for chickpeas, faba beans and field peas amid mostly good to excellent conditions across southern Australia.

Chickpeas

Growers who can deliver early chickpeas to container packers on the Darling Downs of southern Queensland are cashing in on a premium of around $100 per tonne based on Bangladeshi demand for Kyabra chickpeas.

Pulse Australia and Grain Trend director Sanjiv Dubey said this premium will dry up for chickpeas delivered after mid-October, and represented Bangladesh’s preference for high-quality early Australian chickpeas over other origins available now.

“Bangladesh pays a premium for Kyabra for its golden-brown colour, and for early shipment.”

“That market is very active.”

“It’s mostly boxed business out of Brisbane, and they have no early requirement for bulk.”

Growers able to deliver in the next few weeks can get $670-$675/t delivered Downs packer, well above $550-$560/t being bid for delivery from mid-October.

Grain Central understands no bulk new-crop chickpeas have so far been booked out of Queensland ports or from Newcastle, but some bulk business to Bangladesh from December but more likely January onward is expected.

This is to build up supplies ahead of the month of Ramadan which starts in April.

Mr Dubey said growers were reluctant sellers into the market for second-half October delivery onward, and were behind on their normal forward-sales program.

“Growers want to sell after harvest, and maybe only 10-15 per cent has been traded from growers’ hands.”

“Whether it’s NSW, southern Queensland or CQ, $550 is not very attractive for them, and they say there’s no incentive for them to catch that price.”

Concerns about spring turning wet, as based on forecasts from the Bureau of Meteorology have added to grower reticence about forward selling pre-harvest.

Australia has had two memorably wet harvests in the past 10 years: 2010 and 2016.

While rain in 2016 prompted chickpea crops to continue flowering and add yield with little impact on overall quality, Mr Dubey said growers remember 2010 as “a total nightmare”.

“Coming out of drought, growers are very risk averse, particularly in NSW, and they remember 2011 when it rained and it poured and there were big problems with harvest.”

From the trade’s perspective, container costs have risen sharply this month as shippers put congestion surcharges on boxes to help shift empty boxes offshore.

For those shipping pulses out of Sydney, a congestion surcharge of up to US$300 per container is payable.

Boxed chickpeas are normally shipped at 24t per 20-foot container, which means the surcharge equates to more than AU$15/t.

The oversupply of empty containers at Sydney’s Port Botany is mostly 40-footers which have come into Australia filled with manufactured goods from China.

Wheat pulse exporters need are 20-foot food-quality containers.

“This season, most lines are thin on containers.”

Faba beans

Demand for faba beans remains limited as Egypt – the world’s biggest buyer – stays out of the market.,

New-crop is trading at around $380/t delivered Wimmera packer, and $385/t delivered Goondiwindi.

Limited global demand is being seen from secondary markets like Lebanon, Saudi Arabia and Vietnam.

Agri-oz trader Francois Darcas said prices have been stable for a month, but if they fall further, fabas could book themselves some business into India.

“India will buy some if they get very cheap like they did in 2016-17,” Mr Darcas said.

That was when on-farm prices sunk to around $200/t, and bought faba beans additional demand from domestic consumers.

“Our prices are a bit too high for that now.”

On the domestic front, faba beans are expected to crib some market share from field peas, and from canola and soybean meal, if prices fall substantially.

“We may need the domestic market to rescue us.”

On the supply side, the crop keeps getting bigger, with rain in the next week or so forecast to help finish crops in South Australia and Victoria.

Lentils

Nipper lentils for delivery into October are trading at around $650/t delivered to packers in Victoria’s Wimmera region, with Nugget lentils trading at more like $620/t.

The market for both types of lentil is looking like $600/t at best for November delivery onward, when new crop from early districts in South Australia, Victoria and southern NSW will hit the market.

Spikes in the market throughout the current crop year are believed to have all but cleared out Australian stocks.

ETG trader for South Australia and Victoria, Todd Krahe, said demand from Pakistan was driving the nearby premium.

“We’re seeing a lot of demand for prompt shipment from Pakistan, and Australia is out of lentils.”

“On new-crop, there’s not a lot of grower engagement.

“Generally we see it pick up from late September.”

Traders and brokers have told Grain Central that canola and wheat are likely to head up the early sales from growers, and pulses will hit the market on spikes throughout the year.

New-crop exports from Canada are currently selling into South Asian markets, and providing competition for Australian product.

Shipments from Australia and Canada got into India to catch the reduced lentil tariff which was reduced to 10pc over June-August, and has since returned to 30pc.

This reduced tariff prompted some tonnage initially booked for Bangladesh to reposition into India, and has left some exporters with short positions to cover.

Containerised lentils are booked for November-December shipment to India and Sri Lanka as well as Pakistan out of Melbourne and Adelaide.

Neither port is subject to container surcharges which have appeared in Sydney.

“Hopefully container availability will be good through harvest.”

“Shipping lines are advising us that they’ll be well prepared this year.”

Mr Krahe said container rates for the next quarter are looking very much like they will be up to 20pc dearer than those on offer for the current quarter, where demand is minimal.

Mungbeans

Interest in new-crop mungbeans at prices consistent with last year’s values is appearing, with China once again shaping up as the major buyer.

Recent flooding in north-east China is expected to affect the country’s key mungbean-growing areas, where harvest of surviving crops will start next month.

North Queensland’s small spring-planted crop will be harvested in November-December, and indicative prices delivered packer are sitting at around $1400/t for No. 1 grade, $1300/t for processing and $1200/t for manufacturing.

The bulk of Australia’s mungbeans are grown in northern NSW and the southern half of Queensland, and are planted December-January for a March-May harvest.

The summer-grown crop is nominally trading at $100/t below the spring crop, with a reasonably area likely to be planted into paddocks where wheat or barley has been harvested if soaking rain falls by early January.

 

 

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