MarketsFarm — As Russia’s invasion of Ukraine continue to swing markets up and down, typical issues and other external factors have amplified volatility in the pulse markets, according to one trader.
David Newman, owner of Commodius Trading at North Saanich, B.C., explained that while the conflict in Eastern Europe is affecting markets everywhere, the usual factors in pulse markets such as weather, fertilizer prices and crop price competitiveness are still present. But now, their effects have become larger and more complex.
“All the problems are the same. It’s a pain, but it was a pain 20 years ago. Weather is tricky, but it was tricky 20 years ago. These are all the usual problems,” he said. “The trick for us now is how is all of this going to affect each other… (They’re) all the same problems, but now we have to (fix) them twice as fast and backwards.”
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Farmers are also hesitant to plant pulses, he added, because market prices are not as high as for canola, flax or wheat. The inability to reliably predict how markets will fare in the coming weeks is also causing growers to take pause.
“No one is 100 per cent sure how all of that plays out and overlay that with (a lack) of subsoil moisture and it’s complicated to make calculated decisions,” Newman said, adding that the prices of lentils have at least doubled since he started trading in the early 2000s.
“Now you start to think normal prices are now 40 to 50 (cents per pound) and we don’t have a lot of history behind that yet. I think we’re all just trying to adjust to what this new normal is going to be.”
Two major markets for Canadian pulse exports are India and China, both of whom are trading partners with Russia. Newman was unsure where else Canadian exporters would be able to sell if Russia ends up flooding those countries with cheaper supplies.
“We’re going to have to find other markets that will pay more because I don’t think we’re going to compete with Russia for the bottom into some of these markets. But can Russia supply enough for them as well? I don’t know,” he said.
As for the status of this year’s Canadian pulse crop, Newman believes sufficient subsoil moisture reduces the need for timely rains, but he doesn’t know yet if the soil will be fully replenished.
“I think some of the subsoil moisture is being refreshed, but it’s looking like there’s absolutely zero right now,” he said. “Even in Weyburn, (Sask.) where our plant is, (moisture) was good, but how much will the frost and the (snow) melt into the ground?”
— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.
