A Western Canadian crop analyst says there are a couple of story lines on the pulse front for farmers to keep an eye on this year.
Chuck Penner is the owner and a grain market analyst with LeftField Commodity Research out of Winnipeg.
He spoke at CropSphere in Saskatoon.
He talked about what to expect with tariffs in exporting to India with the dry conditions; whether China will buy as many peas this year as 2018 and what he projects Canadian farmers will plant in terms of lentils this year.
Dry Conditions in India
Only a year after India decided to impose a tariff on pulse imports in an effort to protect domestic farmers, Penner believes India may shift on that decision later this year due to very dry conditions in their country.
”The weather may force them into some decisions they may not want to do which could include or could include a reduction of tariffs,” says Penner.
He says this could force them to roll back some of those restrictions.
”The weather in the country is extremely dry across a wide part of the country and that is going to limit their own pulse production so they will have to come back to the table as an importer.”
The Indian government made the decision to protect farmers who form a significant voting bloc.
“They have an election coming up, bit of a wildcard, think we are going to see that in the next couple of months.’
The decision to impose the tariffs resulted in a dramatic drop in exports from Canada.
Will China continue to buy peas?
In 2018 China bought a record amount of peas.
They bought 2-million metre tonnes, up from 1.2 million tonnes in 2017.
Penner says we may see slight decrease this year.
”Maybe not quite at that level, a lot of the discussion that they were using peas as a replacement for U.S. soybeans that doesn’t look like that is the case for all of them, like that increase 800,000 tonne increase isn’t all feed peas.”
He says 2019 should be another good year, but not quite what we saw 2018.
“Their food processing capacity is improving and so there’s a sustainable increase, whether it is 2-million tons, I have my doubts, but it will be considerable more than we have had in any previous year.”
Penner projects Western Canadian farmers will seed four million acres of peas this year, which would be an increase of ten percent.
Things looking up for lentils
2018 was a very rough year for lentils, which saw a huge drop off in what farmers planted.
Penner says producers should see a small increase.
“We have seen some bids for both greens and reds come off their lows and I think that is going to give people a little bit of hope for next year’s marketing. So they may not be selling them yet, but I think they may be putting a few more in the ground.“
Penner is also forecasting lower chickpea area in all major growing countries following higher production numbers over the past two years.
Fababean prices are currently at very high levels so that will likely increase Western Canadian area this year.