Pulse Markets Show Promise Despite Global Food Chain Uncertainty
It seems like a difficult task to determine the state of the world as it relates to the supply of food these days. On April 21, World-grain.com reported that the global grain industry is in a good position to help feed the world during this pandemic, while grain stocks are in a much better supply than experienced during the Great Recession of 2007-09. These comments were made by Josef Schmidhuber, who is a deputy director of the trade and market division of the United Nation's Food and Agriculture Organization in an April 17 webinar.
What a difference a couple of days can make. On April 21, the head of the United Nation's World Food Program Director David Beasley stated that the world is "on the brink of a hunger pandemic" with concerns of "multiple famines of biblical proportions." A combination of wars, locust damage, natural disasters and economic hardship are said to be leading to "the worst humanitarian crisis since World War II," as reported by the Associated Press.
Actions taken by governments around the world to slow the spread of COVID-19 have created further challenges for producers right up through the food chain. India is reported to be on day 28 of a country-wide lockdown that has had effects on labor at the farm level, the processing level, the transportation industry and through to the retail sector.
The Economic Times recently reported that the price for pulses has increased by 20-30%, while processing at come pulse mills has fallen to just 25-30% of capacity due to labor shortages. Labor is also a limiting factor in the harvest of the winter crop and planting of the summer crop.
The USDA's Weekly Food Retail Update for India as of April 17 shows a wide range of situations faced by the retail sector. Some regions are faring well. Some operations are working with 30-50% of normal staff levels, and some areas face difficulty acquiring needed food items due to shortfalls in transportation, restricted access to cash or product availability.
This uncertainty surrounding the largest producer and consumer of pulse crops in the world continues to spill over into prairie prices, as old-crop and new-crop lentil bids show upward momentum this week. As of April 21, Statpub.com reports No. 1 large green lentils to average $30.43/cwt delivered to Saskatchewan plants, the highest level reported in a bit more than two years, given a combination of Statpub and Saskatchewan Agriculture data. This move in price is expected to continue into the new crop, with the range of new-crop bids also up this week to range from $28 to $31/cwt. This would be the highest new-crop prices received since the fall of 2017, or three years.
Red lentils are also shown higher this week at an average of $26.17/cwt, the highest level seen since February 2017, or more than three years. New-crop prices are reported at $26-27/cwt, or the highest new-crop bids seen since the fall of 2016, or four years, according to Saskatchewan Agriculture data.
Cliff Jamieson can be reached at email@example.com
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