PULSE MARKET UPDATE JANUARY 2020
Since Mid-November market prices for pulses have firmed, further reflecting the continued demand for the product in markets right across Europe as well as in the UK.
Roger Vickers, Chief Executive of PGRO, comments that since mid-November market prices for pulses have firmed further. As the turn of the year approached in November, feed values for UK pulses had risen considerably and forward values for crop 2019 were already rising. This was good news for growers, reflecting the continued demand for the product in markets right across Europe as well as in the UK.
Whether peas or beans, there appears now to be little open market crop of good quality available for new trades – and International short sellers making good their commitments have been keeping bean prices high.
The European market for vegetable protein continues to be strong and indications are that this strength is a long-term trend.
Australian faba bean harvest has yielded significantly better quality than that enjoyed in Europe from the 2018 crop and their produce is fetching as much as US$ 750/t delivered to Egypt.
Egypt would normally consume between 700-800,000t of beans annually. It is believed that there may be as little as 450,000t available to them from 2018 crop even with reduced acceptability standards. A temporary switch to lentils and chickpeas seems inevitable, which means good quality new crop 2019 will likely be in strong demand.
UK Pulse markets
Franek Smith, President of BEPA, reports that The size of the crop 2019 is more uncertain than normal. The AHDB’s November early bird survey suggested a potential 8% fall in pulse crop area, although there is no certainty in this.
Availability of seed and seed quality are still significant factors in the spring sown crop area. Derogations for seed quality, permitting sales of 70% germination have been agreed, and this will provide some relief. Growers aiming to save their own seed should certainly have samples tested for vigour and germination quality.
Winter sown beans are generally looking good at this very early stage.
Feed values have increased in recent weeks but in reality, little is now entering the UK feed market as feed exports continue to drive the prices (Spanish bulls eating British beans?).
Commitments of early sellers have forced prices up to levels at which domestic processors have switched to imported peas as a cheaper alternative – at least temporarily. Feed beans have been trading at as much as £230/t ex-farm with January movement, which is a £10/t rise since the turn of the year. Increasing feed product costs is also now thought to be affecting UK demand for the processed feed itself.
Whilst as previously reported the UK crop is most certainly significantly down, the market is also being supported by those holding on hoping for even higher prices.
Crop 2019 prospects look good with the opportunity being presented to sell forward with a premium over November wheat of around £35/t, making it approximately £192/t ex-farm.
For human Consumption Beans
Demand remains in a short market.
The last shipments to the Sudan have already left as the cut-off date for imports is the end of February and the market is now effectively closed.
Recent values have carried as much as a £90/t premium over feed for the very best quality, with less than 5% damage (up to £315/t ex). With significant deductions for damage over 5% up to 25%, such damage has been accepted with values still as high as £250/t ex.
Of course, with traditional market unable to meet demand, buyers have started to look to alternative options. Ethiopian suppliers are emerging and there is a switch to alternative/second choice pulses.
Based on damage levels of max 5%, early trades of 2019 new crop beans for human consumption are available with a premium of up to £30/t over feed, making them worth around £222/t ex-farm.
Crop 2019 contract prices have increased considerably since those for crop 2018 and significant interest has been expressed in production at these new levels with a steady uptake.
With various offers from merchants available, there are minimum/maximum arrangements to consider or flat prices with bonus and deduction clauses available. All are quality driven with a focus on appearance, colour retention, waste and stain. There is the opportunity to realise up to £400/t ex for marrowfats and £300/t for large blues from crop 2019.
It is believed that there is very little of good quality on farm left to buy. Values are relatively unchanged. For good quality peas, around £325/t ex can be expected, whereas bleached samples will fetch less than £300/t ex.
Large blue peas
Values here have continued to improve, and again there appears to be little on farm to purchase. Good quality open market samples might fetch up to £315/t ex-farm depending upon quality and location. Demand continues with micronisers, but these levels are starting to affect other users’ interest.
Offers of bleached samples are also few and far between and would be discounted by up to £40/t.
New crop 2019 contracts are now available for January 2019 movement at up to £300/t ex for best quality samples with less than 10% bleaching.
Despite prices significantly higher than other sources, UK peas are in demand – in part due to speed of delivery, traceability and familiarity. However, at premiums of over US$50/t these benefits will stand little stretching before imports are triggered.
Yellow peas remain of little domestic interest at this time.
Maple peas – are there any on farm unsold? There has been no reported farm trade for some time.