Canada Markets

Prairie Dry Pea Markets Show Signs of Strength

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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Despite global uncertainty and supply chain issues, dry pea bids on the Prairies are reported higher this week, with yellow peas delivered to Saskatchewan plants bid at levels last seen over a year ago. (DTN graphic by Cliff Jamieson)

The weakness seen across the grains this week has failed to spill over into the dry pea market, despite the uncertainty that has gripped global markets over the COVID-19 pandemic.

As of April 1, reports the average yellow pea bid delivered to Saskatchewan plants at $7.30/bushel, up from Saskatchewan Agriculture's weekly price of $6.85/bu. last week, while is the highest price seen in weekly data going back to February 2019. The green pea bid is down from the $12.03/bu. bid reported in early February, but just the same, has bounced from a $10.44/bu. low on March 25 to $10.63/bu. this week.

It is interesting that this price move is seen as the United Nations' Food and Agriculture Organization claims that the world is facing the risk of a "looming food crisis" if steps aren't taken to protect the world's most vulnerable, protect global supply chains and control the effects across the global food system.

Indian demand is expected to be weak as that country harvests its winter crop. A three-week lockdown in that country is bound to lead to challenges within the food supply chain, but on April 1, The Economic Times reports that India's Food and consumer affairs minister is stating that foodgrains will remain in ample supply. The government's announcement points to 810 million of the country's poorest to receive a ration of 5 kilograms of wheat or rice each month at zero cost for the next three months, in addition to existing volumes distributed through welfare programs.

A piece written by G. Chandrashekhar in the Hindu BusinessLine points to chickpeas as the "ideal pulse for free distribution," proposing that chickpeas are easy to prepare without milling, the most economical vegetable protein and the path forward to what he views as nutritional security. It would also boost producer prices that are currently depressed. His proposal is for 2 kilograms of pulses distributed per household that would lead to 9.6 million metric tons of demand over three months.

Perhaps conflicting news, the Economic Times also reported on April 1 that the Indian Council of Agricultural Research is advising farmers to postpone their wheat harvest until April 20 due to the fight against the coronavirus. This may suggest that the distribution system is not as healthy as the government is indicating and bears watching.

The Canadian Grain Commission reports no peas shipped to India in February, while year-to-date shipments are pegged at a modest 128,200 metric tons, up only slightly from the previous crop year.

Canada's dry pea exports to China in February were reported at 78,900 mt of the total 191,500 mt shipped, while year-to-date shipments of 1.0652 mmt through licensed elevators are up 48.7% from the same period in 2018-19. The most recent week 33 data shows 19,700 mt shipped to all destinations, below the previous four-week average of 28,000 mt. Shipping has been quiet in recent weeks, although year-to-date shipping is 27.5% ahead of last year, as of February.

Looking over Saskatchewan Agriculture price data over the past five years, the spot price for both yellow peas and green peas have remained close to unchanged over the course of the month of April on average.

The backlog faced in Canada's rail shipping over the month of February may have caught some short as rail shipping recovers, resulting in higher prices. The number of vessels on the West Coast waiting list for all grains has fallen from a high of 54 vessels as of week 29 to 38 vessels reported for week 34. At the same time, a lack of containers that is faced by much of the world due to a backlog in shipping from China has slowed exports of containerized products.

There may be no easy answers to the current price move in peas, as these are unprecedented times, and for many countries, everything is on the table when it comes to food security. This simply bears watching in the weeks ahead.


DTN 360 Poll

This week's poll asks what you think of the conflicting reports on March 31 on Canada's canola trade with China and how this might affect your seeding intentions. We look forward to your ideas on this poll on your DTN Home Page.

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