CNS Canada – With limited uses for lentils, one market analyst sees more potential for the pea market in Western Canada.
“On lentils we are really restricted to the edible market. Peas are an incredibly versatile product, so we’re using peas both for human consumption and they are quite usable for feed,” said Marlene Boersch, managing partner of Mercantile Consulting Venture.
Both the pea and lentil markets have faced challenges throughout the past year. Exports were down for the 2017-18 crop year after Canada’s largest buyer of peas and lentils, India, placed import restrictions on the crops, which has led to large stocks of the crops in Canada.
According to Boersch, it can’t assumed that India will remove its import restrictions any time soon, which isn’t good news for the lentil market. However she does see market opportunities for peas.
“I personally (see the potential for) increased (pea) exports over this year because of the further increases into China. And that’s related to what’s happening on soybeans and various things and on reduced feed grain production in the world,” she said, adding that exports will still be less than the last two years.
With the current dry conditions across Europe and Australia causing reduced feed grain production, and the ongoing trade war between the United States and China which has soybeans caught in the crosshairs, there is the possibility that more peas could be used for animal feed.
There are reports coming out of India though that there could be crop production problems. According to the state-run India Meteorological Department, as of Aug. 5 the monsoon rainfall has been 10 per cent below normal. Boersch has heard talk of India reducing its import tariffs on wheat, which she said hints at production problems.
“That points toward the monsoon not being as good as they had hoped for and then of course if they have serious problems that would of course force some rethinking in the protectionist policies,” she said.
However Boersch said it would take a major weather problem in India to change lentil prices, as Canada isn’t the only country with huge stocks from the previous crop year. Australia was also affected by India’s import tariffs and has big stocks.
“Our (lentil) production looks to be OK. So there is just no factor that I could point to right now that (would tighten up) that (supply) up over the next (while),” she said.