PULSE MARKET UPDATE – JULY 2020
At the time of writing we still await news of the first pulse crops from the UK…
Roger Vickers, Chief Executive of PGRO, comments on pulse crops…
At the time of writing we still await news of the first pulse crops from the UK. The prolonged drought of the spring, which led us to expect a much earlier harvest, gave way to a period of damp cold conditions that slowed down crop development. Hopefully, yield potential has benefitted in the process – though we will never know.
In many ways little has changed in the market since the last update for May/June. Prices readjusted downwards in the face of the new crop, but there have still been few end users interested in commitment and few sellers prepared to offer, despite the trade doing its best to create enthusiasm. From a seller’s perspective the trade offers look interesting – but with the real uncertainty of crop performance, a reluctance to commit any significant quantity is perhaps understandable.
For some months Egyptian authorities have imposed an export ban on domestic bean crops – about 100,000t was harvested in April. Covid 19 has reduced consumption, with less eating outside the home, and imported bean stocks are currently plentiful – estimated at between 150,000-200,000t. It is thought that the Egyptian Ministry of Trade may lift the ban to support the local market after a dip in economic activity.
During June the Australian production forecasts were released, estimating an area of 235,000 ha with a production estimate of 402,000t. Whilst some northern areas of Australia are in need of rain, the crops in the main production areas of New South Wales, South Australia and Victoria are doing well. Offers for the old crop are priced aggressively.
Good production conditions mean Canadian pea production is anticipated to rise to 4.25 million tonnes. Despite increased world production, there remains good demand and they are forecasting some stability in prices.
By contrast, the USDA anticipated production in the USA will fall to around 384,000ha and produce just 800,000t, a fall of 25%.
In France much of the pea harvest is complete. Yields are generally down due to drought and high temperatures early on and persistent aphid attack. Yields regionally range between 2-7t/ha. The faba bean area increased slightly to 70,000ha, but with harvest just starting, it is too soon to be sure of yields. It is interesting that 28% of the bean crop area is in organic production.
The Lithuanian bean crop area is reported to have fallen 9% to 50,000ha in 2020, whilst German bean production continues to rise, up 15% to 56,500ha. With the continuing disenchantment with Oilseed Rape, growers are looking ahead to crop 2021, with merchants receiving considerable interest in pulses. Buy back contracts are now being offered for both peas and beans.
Lewis Cottey, President of Pulses UK, reports on UK pulse markets…
New crop feed beans are trading at around £195-£200/t ex farm, values which have been stable for quite some time.
The market is at a quieter time phase for feed producers, whether in the UK or in the EU, and the last of the peas being imported for feed have arrived. It is thought likely that in August the feed extruders will return to using beans at this new lower price level.
Crop 2021 buy back contracts are also available. Options exist to work on fixed prices relative to wheat futures with a premium of around £30/t or to enter produce area marketing pools.
Some traders are offering specific premiums for LVC variety types and higher quality traits such as protein levels.
Human Consumption beans…
There continues to be little interest in the Egyptian market at present. It should be noted that whilst the main suppliers are the Baltic States, Australia and the UK, small quantities still arrive from France and shipments of German origin have been received over the last year.
With Australia now producing beans in the northern states too, the window of opportunity between harvests in the different hemispheres is narrowing. Potentially, Australian crop can now be shipped from October. At present the premium for Australian over European crop is narrow, indicating that either Australian crop is too cheap – or European crops are too dear – or both.
There is optimism that the pea crop is better than could have been expected in the late weeks of spring/early summer. Peas that do not make the grade, and are destined for feed trade at a discount to beans, should currently expect no more than £190/t ex farm.
Although it is believed that there are very few around, off contract sales samples with suitability for cooking may fetch around £300/t ex farm.
2021 crop contracts are available with some merchants whilst others are waiting until the size and quality of the 2020 crop is better known. Contracts available have a value range, with either deductions or bonus quality clauses. Rough values are based around £310/t ex farm depending upon quality.
Values are nominally £240-£260/t ex farm, depending upon quality.
2021 crop contracts are typically available within a range £225-£275 for crop 2021.
Yellow/ White peas
Current values are in the region of £235/t.
2021 contracts are available in the range £200-250/t ex farm, with clauses for waste and stain. There are no colour clauses for yellow peas, but the values tend to be lower due to potential competition from imports and large volumes of international trade. A small domestic market exists that puts a premium on UK provenance.
Current values are around £310/t ex farm.
Maple peas have a small niche market and tend to be quickly covered by committed growers. If interested ask your trader if contracts are available.