PULSE MARKET UPDATE – MARCH / APRIL 2021
During the early part of the year UK pulse values were pulled up with rising grain commodity prices.
These now seem to have topped out and whilst values for all commodities have fallen pulses still offer good returns for growers looking to sell.
That said recent demand for exports has dwindled. Issues with containerised shipping has not helped international movements but the reality is a combination of real demand and cost. Most animal feed buyers have gathered sufficient cover for immediate use and UK pulses had risen to a level that made speculative forward coverage a little too much of an adventure. Recent trading has been limited. Domestically we are entering that time of year when stock are turning out to grass and there is an annual dip in feed demand.
The Egyptian market for human consumption beans has been extremely quite for UK sellers since the late autumn, when it became clear that the huge Australian crop had come in early, was very good quality, and was able compete at price parity or less. Nothing has changed in this regard and the pandemic has added to marketing difficulties as consumption has fallen too.
Interest in the UK are now turning to the new crop in the summer. After another wet Winter the general impression is that land is emerging into spring in much better order than had perhaps been anticipated. Whilst the soil is only warming slowly, the seed beds are turning up much more friable than had been feared and reports are generally optimistic that spring sown pulses are going into good conditions. We know from experience that a spring drought could dramatically change the prospects for the crops, but with the early opportunity for roots to go down, the crops should generally be in a better position to perform what ever conditions arrive this year.
It remains uncertain what crop area will eventually be sown and there are good two weeks of peak drilling time remaining. Continuing to go with the AHDB Autumn Early Bird survey, a potential 7% increase in pulse cropping in 2021 and a more normal harvest could see a very significant uplift in availability come harvest.
It is anticipated that the Australian crop 2021 will fall back to a more usual level of around 300,000 tonnes. Much of their productivity being dependant upon timely rainfall, and it is understood that the crop area in the Baltic will remain relatively unchanged. This means that some of the more traditional market opportunities for UK pulses 2021, could well return in the autumn.
Prices have fallen about £12/t since their peak 3 weeks ago. £220/t ex farm is a realistic expectation, although there appear to be few sellers at present. Prices have fallen along with cereals and alternative protein sources. However this still presents a better offer than for much of the marketing year and represents a significant premium over forward prices tentatively offered for new crop at £195/t – £200/t ex farm for October. The more normal £30 premium over wheat futures applies here, but this market is also very quiet. The anticipation is that with immediate demand suppressed, there is further downward potential for old crop beans prices.
Any current demand is pretty much exclusively in the domestic market.
Human consumption beans
This market has effectively been closed to the UK merchants for many weeks and is unlikely to change until the new crop arrives. Visual quality and price will drive this market opportunity when it reopens.
The Pea market has also been quiet of late. Micronizers have covered their requirements for better green peas and prices have fallen back a little. There is little new immediate demand along the supply chains.
It appears that uptake for marrow fat peas production will take a downward turn in 2021 despite trade enthusiasm. For anyone still to make up their mind contracts for marrow fat pea production are available.
Open market samples remain of interest but critically quality is paramount. Good quality old crop produce could fetch up to £330/t ex farm.
As mentioned many times, open market peas are frequently produced from farm-saved seed and tend to have more off types in the produce, making it harder to reach the top premiums. When contracted production comes up short, open market offers may receive greater buyer interest, but significant essential processing costs may be incurred to clean up the sample.
New crop contracts for 2021 are readily available, with for bonus payments for the best quality. Contracts are currently up to £355/t ex farm for top quality samples that have zero bleaching. Deductions for up to 10% bleach and 10% waste and stain can still be contracted at £325/t ex farm.
Green/ Blue peas
Green peas have more flexible marketing opportunities than marrow fats. Broadly, the best quality enter the snack and export market, followed by micronizing, canning and feed.
The current values on the open market range between about £230 – £275 /t ex farm having slipped back a little in recent weeks. Poor quality lots destined for animal feed could be below £190/t ex farm. This wide range in values emphasises the incentive to pay attention to detail in the growing season right through to post harvest storage.
Whilst 2021 crop contracts were typically available within a range £215 – £260/t ex farm uptake has been significant and contract availability is harder to find.
In recent weeks some open market yellows have appeared in the market. Values have also fallen but £220/t-225/t ex farm might be expected.
New crop yellows might be contracted at up to £225/t ex farm.
Typically open market yellows tend to trade at a premium to feed peas of about £20/t ex farm
Internationally the pea flour and pea protein market tends to favour the use of yellow peas. This market is growing rapidly but as yet has no real momentum in the UK. Value of the end products, which are higher than the conventional alternative goods is likely to be a drag on market development short term. But this market is not going to go away and would appear to have a bright future.
Crop 2021 contracts are available.
A small market for which 2021 contracts appear to be complete. With more contracted for the season ahead than in recent years.
Advocates for maple peas like them for their mottled appearance and relatively untroubled visual quality standards in comparison to green peas, and of course a premium value. Contracts were offered at over £300/t- £325/t ex farm depending on variety.
Offers for recent free market samples of old crop Mantara have been around £310/t ex farm.