Markets

Pulse Update: Tight freight drives chickpeas, lentils

Liz Wells, February 17, 2021

Port Giles is one of six South Australian ports to be exporting pulses as well as grain this year. Photo: Viterra

LIMITED freight openings in bulk and container shipping coupled with solid demand from export markets have driven up prices for chickpeas and lentils in the past month.

Faba bean prices have dropped to a new seasonal low, which is buying them demand in the domestic stockfeed market.

On mungbeans, dry conditions have put a stop to forward selling by growers and traders, and lifted the market a nominal $50 per tonne in recent weeks.

ABARES has revised its tonnage and area estimates for Australia’s major pulse crops as contained in tables at the end of this story.

All prices quoted are in Australian dollars.

Chickpeas

Solid demand from the container-only Pakistan market has supported prices for chickpeas, which are trading at around $660-$670/t delivered Downs packer, up a solid $100/t since last month.

Bulk demand from Bangladesh on combination cargoes has also helped to underpin prices.

Grain Trend director Sanjiv Dubey said the current quarter had been “a total nightmare” for container exports, but significant volumes had nonetheless been shipping out of Brisbane and Sydney, mostly to Pakistan.

“What we’re seeing is interest for June-September too, which is very good, and indicates that the market is fundamentally firm,” Mr Dubey said.

“That gets us almost up to our own new crop, which lends a very good feel for the upcoming planting period.”

Mr Dubey said boxed chickpeas were mostly going in consignments of a maximum 10 containers when, in the record chickpea season of 2016-17, consignments were more like 40-60 boxes.

“One of the bottlenecks is going out of Australia, and a lot of shipping lines have swayed away from servicing the sub-continent.

“There aren’t many empty containers around.”

Mr Dubey said demand from Pakistan was so strong, and supply of containers was so limited, that a bulk cargo to Pakistan could work.

“We haven’t seen that done for a long time, maybe since 2011.”

Bulk freight has gone up over recent months in response to demand from Australian shippers, and this in turn has taken some pressure off container demand.

“There’s a big crop and a lack of container availability, and demand is huge.”

Central Queensland (CQ) does not have the tonnage to export any more bulk cargoes this season, but shipments out of Brisbane to Bangladesh are continuing into this month.

Despite a good chickpea crop in northern New South Wales for the first time since 2016-17, bulk exports are not expected out of Newcastle as its terminals focus on wheat and durum shipments.

Faba beans

Prices for faba beans have softened in the past month to the point where they have bought themselves maximum domestic demand as the best-value form of protein in feed mixes.

With Australia now in the midst of shipping close to 190,000t of faba beans to Egypt — its biggest ever export program for fabas — demand for bulk cargoes appears to have tailed off.

“I think enough has been exported for a while, and what’s keeping the market ticking are local values,” Agri-Oz Exports general manager François Darcas said.

Values have fallen by at least $20/t in the past month to around $320/t delivered.

“Prices for fabas have been softening, and growers have sold a reasonable amount now.

“A very big tonnage is shipping from South Australia between October and March, and it will have exported as much as it did in the whole 2016-17 season.”

Mr Darcas said demand from secondary markets like Oman and Vietnam for containers had been providing some support to prices, but feedmills and over-the-fence sales were offering growers better returns.

“In Victoria, feed demand is preventing the market from falling further, but in the long-term the feed market may not be sufficient to support it; it may drift a bit lower.”

Egypt’s needs are seen as covered until June-July, and traders may book further cargoes to cover its needs ahead of European crop availability from September.

Lentils

Smaller Nipper-type lentils are trading at around $700-$705/t delivered up-country  packer, with larger Nugget-type lentils trading at $680-$690/t, up $50-$70/t from mid-January levels.

Delivered port prices for both types are around $690-$700/t.

Combination cargoes to Bangladesh, Egypt and Turkey, supported by container sales to other markets including Sri Lanka, are driving demand.

“Reasonable volumes have been exported already in bulk, and that certainly helps the market,” Centre State Exports managing director Jeff Voigt said.

“The container market continues to be very tough and that hasn’t got a lot better.”

Shipping stems indicate six of South Australia’s eight bulk grain ports are exporting lentils at present.

They include Wallaroo on the Yorke Peninsula, which Grain Central understands last shipped bulk lentils in 2013.

Traders including Mr Voigt said growers had been careful not to oversell into a falling market, and their strategy had paid off.

“There’s still a reasonable amount of lentils in growers’ hands; they traditionally spread out their selling, and it looks like they’re doing it again this year.”

In a statement, South Australia’s major bulk handler Viterra said it last month exported more than 200,000t of wheat and lentils in total from Port Giles and Wallaroo alone.

Mungbeans

Prices for mungbeans are up around $50/t on last month at around $1300/t for No. 1 grade, $1200/t for processing and $1100/t for manufacturing.

However, Deacon Seeds general manager Mark Schmidt said the market had become a nominal one as lack of rain in Queensland had put a stop to grower willingness to sell forward.

“It’s starting to get messy in some places,” Mr Schmidt said.

“Last year we planted on full moisture and got an average yield of 1t per hectare.

“This year’s crop was planted on variable moisture; some crops are doing well, and others are really feeling the lack of rain.”

Southern and Central Queensland (CQ) and northern NSW are the main growing areas for mungbeans.

Mr Schmidt said the NSW crop as far south as Dubbo had endured some very hot weather during flowering but was otherwise in good stead.

“CQ is very very patchy. A lot of people up there didn’t plant, but if they get the rain, they will plant into late February, and some will go into early March.

“The Darling Downs could still plant until the end of February.”

Showers and storms are around in mungbean-growing areas, but Mr Schmidt said a general rain was needed soon to underpin yield potential.

“Mungbeans are a tough crop, and they respond well and quickly to rain, but we can’t expect big crops if we don’t get good rain soon.”

The crop will hit the market between mid-March and late June, and China remains the major destination for this container-only market.

“China’s still in the market, and we’ve had a little bit done for Indonesia, but most other countries only buy when we’re close to harvest.”

Planted area for mungbeans in total in NSW and Queensland is currently seen at around 100,000ha.

ABARES lifts major pulse crops estimates

ABARES has forecast production of Australia’s five major pulse crops at 2.97 million tonnes (Mt) in its ‘Australian crop report – February 2021‘ released on Tuesday. This is up  3 per cent from its previous forecast, released in December, of 2.87Mt,

State Chickpeas Field peas Faba beans Lentils Lupins
Qld 275,000 0 nq 0 0
NSW 396,000 61,000 nq 10,000  130,000
Vic 68,000 83,000 nq 306,000 44,000
SA 11,000 105,000 nq 300,000 50,000
WA 5,000 45,000 nq 18,000 550,000
National 755,000 294,000 510,000 634,000 774,000
Change Up 2pc Up 2pc Down 1pc Up 3pc Up 8pc
ABARES Dec 737,000 287,000 516,000 616,000 714,000

Table 1: February 2021 estimated tonnage for major pulses by state, and ABARES previous estimates released in December.  Source: ABARES

State Chickpeas Field peas Faba beans Lentils Lupins
Qld 230,000 0 nq 0 0
NSW 220,000 34,000 nq 7,000 68,000
Vic 45,000 55,000 nq 180,000 38,000
SA 8,000 85,000 nq 170,000 40,000
WA 5,000 35,000 nq 11,000 350,000
National 508,000 209,000 269,000 368,000 496,000
vs ABARES Dec 498,000 201,000 269,000 368,000 496,000
Change Up 2pc Up 4pc Steady Steady Steady

Table 2: February 2021 estimated area for major pulses by state, and ABARES previous national estimates released in December. Source: ABARES

 

 

 

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Comments

  1. Philip+Burrill, February 18, 2021

    Wonderful informative article on current pulse markets, plus helpful additional details to help me with a better understand of how Australia’s pulse trade operates. Great work

  2. Hello, I have a question : in your above saying

    …. LentilsSmaller Nipper-type lentils are trading at around $700-$705/t delivered up-country  packer’s plant, with larger Nugget-type lentils trading at $680-$690/t, up $50-$70/t from mid-January levels. Delivered port prices for both types are around $690-$700/t…..

    How come when delivered to the packer price is Usd 700-705/mt and when “delivered to the port” 690-700$

    Thank you,
    Yusuf Alev

    • Henry Wells, February 18, 2021

      Hi Yusuf, Thanks for your question about prices. Maybe in my own mind I would explain what might look like a price anomaly in this way. Spot quotes will reflect spot demand. “Up-country packer’s plant” transactions would typically flow towards the containers market. “Delivered to the port” in this case might reflect bids for bulk vessel, which this week might be less than the packer’s bid, regards, Henry Wells, Commodities Editor.

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