Will the Good Times Last for Chickpeas?
Even though 2017 chickpea yields were down in western Canada, most growers aren’t too disappointed with this year’s results. Record prices have taken the sting out of lower production and kept revenue per acre looking pretty good.
Exactly where the 2017 yield ended up is a matter for debate. The final Sask Ag crop report pegged the yield at 1,123 pounds per acre, up from its earlier estimates but still lower than StatsCan’s 1,225 pounds per acre. Meanwhile, most reports from the field have put yields even higher. Regardless of the exact number, the Canadian crop will be considerably smaller than last year, and old-crop carryover from 2016/17 was next to nothing. In the US, chickpea acreage nearly doubled but yields there were also reduced and the crop increase was muted.
In the grand scheme of things, global chickpea markets have been running on fumes for months with supplies of medium-large calibre kabulis nearly nonexistent. Traders had hoped that a large increase in the North American crop would tide them market over until 2018 crops started arriving, but it didn’t turn out that way. Hence, the record prices.
But as any farmer or trader knows, “the best cure for high prices is high prices” and the chickpea market is setting up for a correction. Farmers around the globe are seeing these extreme prices and hoping to cash in, and that will cause the market to tip over. The only question is when.
The Australian chickpea harvest is underway and although most of the crop is desis, some observers suggest kabuli acreage has gone up there. Those supplies could start hitting the marketplace within weeks. The Argentine crop is also coming available and will start to fill the gaps soon. Even so, both of these southern hemisphere crops aren’t large enough to fully meet demand.
Further out, the two big producers are India and Mexico. Contacts in those countries are indicating very large acreage responses now that planting is getting underway. In India, kabuli chickpea prices are far superior to any other pulses and are attracting a lot of attention from farmers and in Mexico, it’s a similar story.
The Indian and Mexican kabuli crops will be harvested in Feb/Mar, but prices won’t wait until harvest before reacting to fresh supplies. Typically, the market already starts to move lower once the crop is well established and looking favourable. And when prices are at an extreme high, the reaction is often large and swift. Of course, the weather still has to cooperate and there are some dryness concerns in north-central India that could keep the market nervous.
Even further out, strong new-crop (2018) bids have been reported in both Canada and the US. We’re also hearing that there is heavy demand for seed for next spring’s crop. This tells us there will be a large acreage response in North America as well. Again, favourable weather will be needed to make that a reality. In the end though, with so many farmers trying to grow more kabuli chickpeas, it’s inevitable that prices will drop in the coming months.
Source : Albertapulse