MarketsFarm — Prices for Canadian lentils, along with other pulses in the country, have slightly declined since the start of 2022. However, one pulse buyer thinks the next few months can recharge the market.
Lionel Ector, president of Diefenbaker Spice and Pulse at Elbow, Sask., explained that a good Australian lentil harvest in December has filled the demand for the crop in India and as a result, more Canadian lentils are staying home.
The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) estimated this year’s crop at 633,900 tonnes.
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The Australians “have really been the ones supplying the market with lower freight rates into the Indian subcontinent,” said Ector.
“We’re into that time frame where India will be harvesting soon. The processors within India and the market, they all consume their harvest before they start importing a bunch of Canadian or Australian lentils because they don’t have the storage or infrastructure for holding long-term inventory.”
An estimated 1.606 million tonnes of lentils were produced during the 2021-22 marketing year, according to Agriculture and Agri-Food Canada (AAFC).
Lentil prices have declined between two to nine cents per pound over the past month, according to Prairie Ag Hotwire data. Other price declines in Canada were seen in chickpeas (up to 18 cents/lb.) and peas (up to $1.50 per bushel) since the start of 2022.
Turkey’s lentil harvest in May can also affect the amount of Canadian exports going into the country, which would then be distributed across the Middle East, Ector said.
However, demand for lentils tends to increase during the Muslim holy month of Ramadan, which takes place from April 2 to May 2 this year. Adherents typically fast during daylight hours between a pre-dawn meal and a nightly feast.
“There should be some buying to help fill that need around that holiday,” he added.
North American weather will greatly affect how many lentils Canada grows this year, which in turn would affect worldwide demand. The early projection from AAFC predicted 2.5 million tonnes to be produced in 2022-23, but Ector is doubtful about that figure.
“We’re in an extreme drought. We have been in two years, some might say three. We’re going into spring with major dryness concerns and the market hasn’t really factored that into the pricing at this point in time,” he said. “Factor that in with demand, it’s really a weather market.”
AAFC’s next outlook for principal field crops is due out Feb. 18; Statistics Canada’s next report on stocks of principal field crops as of Dec. 31 is due out Feb. 8.
— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.
