Good News for Pea Markets
The recent announcement that China will drop its import tariffs on Canadian peas was very welcome, although not a complete surprise. Typically, trade agreements are worked out ahead of the official trade mission, with politicians mainly there for the announcements and publicity. The odds were high that something positive was going to happen; it just wasn’t clear what or when.
A day or two before the announcement, we started hearing that some farmers with production contracts for maple and green peas were being called to start hauling. Clearly, buyers were already betting on a breakthrough for pea exports to China.
Those who might have expected a sharp spike in prices on the heels of this announcement are probably a bit disappointed by the size of the market’s reaction. Keep in mind, the scale of the chart below tends to downplay the latest changes. The response seems to vary between buyers; those with immediate sales to China showed larger gains.
We also noticed a larger response in maple pea bids than greens and yellows. In the past week, the average maple pea bid rose 75 cents per bushel, while the prairie-wide bid for greens was up 25 cents and yellows closer to 20 cents per bushel. It’s not that surprising that maple peas showed the biggest early reaction as it’s the market portion in which Canada and China are most interdependent.
Canadian export data this year is delayed more than usual but in the first quarter of 2025/26, exports of green and “other” (mostly maple) peas were only about half of the 5-year average, which reflects the impact of China’s import tariffs. At the same time, yellow pea exports were only 9% behind average, with India and Bangladesh picking up the slack. It’s also worth noting that Canada exported 77,000 tonnes of peas (mainly yellows) to China in October.
The drop in Chinese tariffs won’t take effect until March 1, but peas still need to be assembled for those shipments, in addition to the regular pea shipments to other destinations. These extra volumes should result in stronger bids as more peas need to be drawn into the export pipeline. That said, it won’t likely be a runaway rally, for a few reasons.
For one thing, farmers had contracted large volumes of green and maple peas last spring. Because there hasn’t been strong movement of those classes until now, these inventories are still waiting to enter the export channel before more uncontracted supplies are needed. That’s not so much the case for yellow peas, which have been moving to other destinations.
Click here to see more...