From The Sask Pulse Growers Newsletter.
Indian Imports To Pick Up Amid Weather Concerns
Concerns in the global agricultural markets have already been triggered due to dry conditions in parts of the world - Southeast Asia and Brazil, for instance – and the looming threat of ElNiño (unusually warm ocean water temperatures that cause fluctuating droughts, floods, and crop yields in parts of the world). Add to that the fact that speculative capital has begun to flow into agri-commodities (mainly sugar, grains, and vegetable oils whose prices have spurted), and it seems more likely that India’s recent forecast of a below-normal rainfall in the country during the upcoming southwest monsoon season – June to September – will skewer the world pulse market over the coming months.
Major crops of India’s karif season (planted June/July and harvested September/October) include rice, coarse cereals (maize, sorghum, pearl millet), oilseeds (soybean, groundnut), pulses, and cotton. Sugarcane is also harvested in the last quarter of the calendar year. Close to a third of annual pulse production is planted and harvested in the karif season. Major pulses this season include pigeon pea, urad (black gram), and green gram. Yields during the season are as low as 9 bushels per acre (bu/ac) and are impacted
by the spatial and temporal distribution of rainfall. Area planted to pulses is usually 25-27.5 million(M) acres.
India harvested 6.3 M tonnes during the 2013 karif season,as compared with the season’s target of 7 M tonnes, only because unseasonal rains damaged a part of the crop. But the rabi harvest more than compensated for the loss, with a harvest of 13.5 M tonnes. For karif 2014, the production target is 7 M tonnes. Even before we heard the official forecast for sub-normal rains over the coming months, pulse imports into the country were continuing steadily. The Indian market’s price-consciousness is well known and economically-priced yellow pea is India’s favourite. Flour made out of yellow pea is blended with the more expensive desi chickpea flour. Imports of urad, tur, and green lentil from Myanmar also continue.
Over and above this, India has contracted sizeable quantities of pulses, scheduled to arrive during August, September, and October, with the hope that Canadian logistics problems will have eased by then. Trade representatives estimate the volume of contracts for forward shipments at about 600,000 tonnes of Canadian yellow pea, consisting mostly of new crop at prices ranging between $370/tonne and $420/ tonne. About 50,000 tonnes of Canadian-origin lentils have also been contracted, at prices ranging between $580/tonne to $660/tonne for November/December arrival. So, what will drive the Indian pulse markets and in turn the global market in the coming months? Primarily, the weather. Given the overhang of stocks at origins such as Canada, Indian importers expect prices to weaken as the market moves into the crop growth cycle in the northern hemisphere.
Pulse planting and production in North America is widely expected to be a large one in 2014, nearly similar to 2013.
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Source: Saskatchewan Pulse Growers