Posted: November 3, 2013 | By Communications Coordinator
Canadian and US chickpea growers have been dealing with declining prices since shortly after the 2013 crop was in the ground. Good growing conditions have improved the yield outlook but it was actually the large old-crop supplies that first started weighing on the market. The good-looking 2013 crop just added more pressure on prices.
We often say that the size of the Canadian chickpea crop has little impact on markets. While that’s true for overseas markets, there certainly is some effect on the North American market, which represents nearly half the demand for Canadian chickpeas.
Based on yield estimates from StatsCan and Sask Ag, it looks like the 2013 chickpea crop will be roughly the same size as last year. Unfortunately though, a bigger carryover means that supplies will be larger. Those larger old-crop supplies weren’t caused by farmers unwilling to sell but rather the lack of opportunity to deliver due to limited export sales.
Unfortunately, it looks like the lacklustre export market won’t improve much and may get even weaker. The large good-quality North American crop is available now and the Australian crop will follow shortly after. We often think of the Australian crop as mostly desis. That part of the crop is expected to decline this year, but kabuli production is actually expected to rise to nearly 100,000 tonnes, not far off from the Canadian or American crop size.
Following these crops, the Indian and Mexican kabuli crops will start to hit the market in the February-March timeframe. Farmers in Mexico and India are starting to plant the winter crop now and the favorable soil moisture will be a good incentive to increase acres. But it’s still too soon to tell exactly how many acres they will plant. In India, 2.2 million acres of pulses have already been planted versus 1.5 million acres last year at this time, but there isn’t a breakdown by type of pulse yet. Kabuli chickpeas are the one pulse crop that can be exported by India, increasing its attractiveness for farmers.
The bottom line is that it will take a crop failure in one of those countries to spark the market higher. It’s still very early but right now, conditions are looking positive rather than negative. Unless that changes, it will remain difficult to market kabuli chickpeas again this year. The best-case scenario is calling for steady prices, and the worst-case looking decidedly less friendly.
Pulse Market Insight provides market commentary from Chuck Penner of LeftField Commodity Research to help with pulse marketing decisions. Pulse Market Insight is sponsored by Growing Forward, a federal-provincial-territorial initiative.