Farms.com Home   News

Pulse Market Insight

While parts of western Canada battled their own heavy rains the past week, the monsoon situation in India has been just as critical for pulse markets. Two years of deficient monsoons have led to razor-thin domestic supplies and boosted pulse imports to record levels that have drained global supplies. Needless to say, Indian marketers have been closely following the outlook for monsoon rains. And because so much is riding on these rains, Indian farmers are probably even more obsessed than Canadian farmers with weather forecasts.
 
Just as a refresher, there are two main pulse crops in India. The rabi or winter crop is the larger one and that’s when Indian farmers plant chickpeas, lentils and peas which affect Canadian markets more directly. The kharif (summer) crop is being planted now and the largest pulse crop is tur or pigeon peas. Even though it isn’t a Canadian crop, tur does influence demand for imported green lentils which act as a substitute.
 
The kharif crop can also have an indirect effect on other pulses that Canadian farmers grow. Supplies of all pulses in India have been extremely low for some time and prices of most types are at all-time highs. When freshly harvested kharif pulses hit the market in November, it will allow the entire pulse complex to unwind a bit as Indians shift consumption to cheaper kharif pulses.
 
Because it’s been so dry, the entire country has been waiting anxiously for the southwest monsoon rains which allow kharif planting to begin. At the beginning of the season in early June, the rains were slow to arrive and had started to raise concerns. But in late June and the first half of July, rains have been well above normal and have now caught up to and passed normal levels.
 
 
Besides improving soil moisture and yield prospects for the kharif crop, the situation has boosted planting of pulses. As of July 8, 5.1 million acres of tur had been planted, 49% ahead of last year and 74% ahead of the 10-year average pace. The quick start and extremely high prices will likely encourage Indian farmers to increase seeded area, as long as seed supplies are available.
 
Canadian farmers know that when prices are at very high levels and production response, the resulting price reaction can be sharp. Even though Indian tur prices are off the highs from late 2015, they’re still historically very strong and green lentils are at record high levels. This means that a larger Indian tur crop would weigh on prices there, with considerable downside risk. This doesn’t necessarily mean Canadian prices will necessarily follow suit, with other important markets for our green lentils, but Indian demand may soften.
 
While it’s still early, the southwest monsoon can also affect prospects for the rabi crop, which includes the pulses that Canadian farmers grow. Planting of that crop starts in November and it relies heavily on stored soil moisture from the summer monsoon season. If rainfall stays plentiful through the kharif season, it improves prospects for rabi crops like chickpeas, lentils and peas. And that could have a large impact on Canadian exports in the second half of 2016/17. That’s another reason why monitoring the Indian southwest monsoon is important.
 

 

Source : Albertapulse

Trending Video

Market to Market

Video: Market to Market

Lawmakers fan out for home districts leaving policy to the Federal agencies. We’ll recap the week of news. Taking an experiment in cover crops to the next level. And, commodity market analysis with Naomi Blohm.