PULSE MARKET UPDATE – NOVEMBER 2020
Although for the past few months the trade has been predicting a slight fall in pulse crop area for harvest 2021, the recent AHDB Early Bird Survey figures published November 27th suggest a further slight increase of 7%, with significant decreases in spring barley, oilseed rape and fallow land. https://ahdb.org.uk/cereals-oilseeds/early-bird-survey
What we can be certain of is that cropping forecasts are always wrong. Whilst the survey does not break down the pulse crop area the trade is reporting increased interest in, pea cropping for 2021 and requests for contracts are being welcomed. The immediate demand for domestic pulse consumption is also increasing with rising alternative commodity markets and values look stable.
The predicted large, Australian bean crop has materialised and has begun to find its way into the market and demand for UK beans for human consumption has dried up. The Australian beans, with better visual quality, are undercutting UK feed bean prices. It looks to all intents and purposes as though these avenues are now closed to the trade until crop 2021.
Bagged produce destined for Sudan has been in good demand, but the market is small and issues with the international shipping container availability and port handling capacity means trade flow has been further restricted. The window for these exports is closing rapidly. If produce has not left before mid-December, it is unlikely to reach the destination in time to clear the import window, which effectively closes in January.
The variability of the cropping season and the uncertainty about the UK crop size remains a conundrum. Whilst pre- Christmas demand for feed both domestically and in Europe appears to have been satisfied, there is confidence that demand will return later in the winter. For now, prices for feed appear to be supported by recent increases in alternative commodities such as wheat, soya and rape meal but it remains to be seen whether these have now peaked. If they begin to fall then interest for pulses as feed may wane a little. The market is generally quite quiet, a combination of demand, time of year and the Covid-19 malaise.
Prices firmed slightly through November. With most buyers currently satisfied the ex-farm values are notionally around £210/t . The current feeling suggests a little upward potential later in the winter, but very much subject to the values of other commodities being maintained or increasing further. Feed exports are not expected to present a new opportunity until the middle of spring 2021.
Demand from the fish feed market both at home and abroad is up a little year on year. Beans are used as a higher protein sticky binder and tend to find favour when their premium is less than €100/t over high Hagberg wheat.
New crop (2021) sellers may accept offers with premiums £30/t over November wheat.
Human consumption beans
There is effectively no demand. Australian crops have now hit the export market at prices less than or equal to the UK feed bean values.
The crop area is reported as up, but the yields are down. An average of 3t/ha is suggested for a typical green/blue pea with significant variation and individual crops showing huge variation in grain size. Early crops generally had lower yields, but there was excitement about the high quality. Later crops yielded more but, delayed by the rain suffered from some significant bleaching. The trade is faced with a wide variation in quality and as a result there is a wide variation in the open market values for peas.
Open market samples are harder to move unless of good quality and can then expect up to £305/t ex farm. This compares with contracts delivering top quality of up to £330/t ex farm.
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.
New crop contracts for 2021 are readily available, with for bonus payments for the best quality. Contracts are currently up to £335/t ex farm.
Green/ Blue peas
Prices have firmed a little further for the best quality. Pale / bleached lots might realise £220/t ex farm but samples with good colour retention suitable for micronizing, could expect around £240/t. The best quality with good colour, soaking and cooking characteristics can expect around £270/t.
2021 crop contracts are typically available within a range £215 – £260/t ex farm and there is significant grower interest.
More recently yellow peas have started to attract a little more interest from both domestic processors and European buyers. This, from a very low level within the UK, making it difficult to forecast a trend. This probably reflects the growing profile peas are getting in health messages, flour production and snack processing.
Current values are in the region of £215/t ex farm. With import values having firmed.
There is a view that yellow peas have a significant role to play in the future of UK pulse production.
2021 contracts are available, but values are fluid
This is a small market, effectively spit between the varieties Mantara and Rose.
Rose, demanded for export, is perceived of higher quality for food and snack consumption. Yields of Rose were a little lower than anticipated and values have risen towards £330/t ex farm.
Mantara fills the niche for pigeon enthusiasts but demand is fully satisfied. Nominally valued up to £300/t ex farm if a buyer can be found.
Contracts have been in strong demand with typical offers for Mantara around £300/t and Rose £325/t ex farm. Contract offers are now getting harder to find.