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How Are Pea Prices Outside of Canada Behaving?
 
Because Canada dominates the export trade of peas, it’s normal to focus on conditions within our own borders as the only things that matter. Price movement within western Canada is a key measuring stick but it mostly reflects the supply situation here, including how willing farmers are to sell their crop.
 
In the past few weeks, elevator bids for yellow and green peas in western Canada (and the US) have rebounded from the harvest lows. Part of the recovery is normal seasonal behaviour when farmer deliveries start to slow down again, but there is some fresh interest from overseas buyers.
 
In previous reports, we’ve discussed why Canadian and overseas markets don’t always move together. That’s why monitoring prices in other locations, including competitors and buyers, can uncover market situations that may not be visible here. That’s becoming even more important as other countries are getting more involved in the pea trade. For example, India used to import most of its peas from Canada, with smaller volumes from France, the US and Australia. More recently, imports have been flowing into India from many more origins, especially the Black Sea region and eastern Europe. In October for example, peas have landed in India from 16 different countries although Canada is still the largest supplier.
 
The most important part of the charts below is the price direction and movement, which are good indicators of conditions within those countries. We caution against drawing conclusions from the spreads between price series, as the prices can reflect different quality, location (on-farm, inland or seaport), ownership (farmer, exporter, wholesaler), bids versus offers or other factors.
 
 
 
The chart shows that in key importers – India and China – prices are still coming down off the earlier highs. To a large degree, that’s in response to the record supplies of new-crop peas just starting to arrive at their ports. In exporting countries, yellow pea prices have levelled off or even started to rebound but, compared to last year’s highs, this recovery is very modest.
 
Aside from Canada and the US, there aren’t a lot of green pea exporters, so our price series are limited to the demand side. In both India and China, green pea prices haven’t dropped nearly as sharply as yellows, partly because green peas hadn’t hit the same heights as yellows earlier. Over the past few weeks, green pea prices in these importers have shown more strength, reflecting the smaller production increases in Canada and the US. This has allowed green peas to move to the more traditional premium position over yellows.
 
 
 
Price movement in these other countries provide some clues about the short-term direction for Canadian bids. In general, the flat yellow pea prices in other exporters and declining values in importers suggest there may not be a whole lot more upside potential for yellow pea bids here. The outlook is a little more optimistic for green peas as prices in key importers are firmer.
 
Of course, new market events always come along that can change the outlook. Probably the most significant will be the development of the Indian rabi pea (and chickpea) crop. That outcome, with planting now underway, will be the largest single factor that will determine price direction in India. This in turn will spill over onto Canadian prices, for better or for worse.
 
 
 
Source : Albertapulse

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