Week 12 Canadian Grain Commission data shows the movement of Canadian bulk peas and lentils off to a slow start this crop year, as seen in the attached chart. Movement of bulk product through licensed export channels is well-behind the respective three-year average, as seen by the blue line for dry peas and black line for lentils.
Bulk export data does not explain the total picture for exports, but it is currently the most up-to-date information and could be viewed as an early warning sign. Over the past five years, bulk exports of peas have accounted for an average of 78% of total exports over the course of the crop year, using a combination of Canadian Grain Commission data and Statistics Canada data, with movement as high as 88.8% in 2015/16. Lentil movement through bulk channels has accounted for an average of 25% of total movement over the past five years, while reaching as high as 35% in 2016/17.
To highlight the recent trend of early movement in the crop year seen in recent years, the cumulative export of peas as of week 12, which represents the first 23% of the August-through-July crop year, has averaged 36% of total crop year exports over the past three years. Movement of bulk lentils makes up a lesser share of total crop year exports, with an average of 11% of total exports shipped through bulk channels in the first 12 weeks of data.
Following a record crop of 23 million metric tons produced in India in 2016/17, exports to that country may provide a challenge for the year ahead. August export data points to 10,000 metric tons of peas exported to India, representing 10.5% of total exports for the month, according to CGC data. For contrast, in August 2016 158,500 mt was shipped to India, representing 54% of the total export volume that month.
An article posted in the Hindu Business Line this week titled "Will bumper crop derail India's pulses deal with Canada?" suggests that a record 23 mmt pulse crop in India in 2016/17 and a potential 21 mmt crop in 2017/18 has the global pulse trade in a tailspin.
In addition, Canada continues to negotiate market access issues. While Canada is allowed to ship unfumigated product until the end of this calendar year, there remains a lack of clarity as to what will happen after that date. The current process allows for fumigation to take place after arrival given an elevated inspection fee charged, while this option is poised to end on Dec. 31, requiring this fumigation to take place at origin. Given that Canada's climate is too cold for this to facilitate this fumigation over much of the year, this becomes an issue of market access.
The piece said a number of delegations of Canadian ministers and officials have visited India, with more set to arrive in November. It added that "Canada may drag India to the WTO seeking a level playing field for all suppliers."
Despite this uncertainty, yellow pea prices delivered to Saskatchewan plants have increased to $7.60/bushel from October lows, up 7% from the three-year average for this week according to Saskatchewan Agriculture and Statpub.com data. Green peas are flat at $8.20/bu., $.01/bu. higher than the three-year average for the week.
Large green lentils are indicated at $37.88/cwt delivered to Saskatchewan plants, while are 14% below the three-year average for the week. Red lentils are bid at $20.16/cwt, down 35% from the three-year average.
Cliff Jamieson can be reached at email@example.com
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