australian pulse une th market news · 2016. 6. 12. · australian pulse market news june 30th 2013...

Australian Pulse

MARKET NEWS

www.pulseaus.com.au

JUNE 30th 2013

This edition of Australia Pulse Market News covers the period where North American crops are established and the Indian sub-continent summer crop is being planted.

The progress of these crops and the strength of the monsoon season in the sub-continent, to provide soil water for their winter crops, are important pointers to the potential state of the market for Australian pulse growers for the period through to late August.

Contents World markets ......................................................................................................................... 2

India ......................................................................................................................................... 3

India’s current and emerging Pulse Situation ...................................................................... 3

Canada ..................................................................................................................................... 4

Europe ..................................................................................................................................... 6

Australia Pulse markets ......................................................................................................... 7

Field pea ............................................................................................................................... 7

Beans .................................................................................................................................... 8

Chickpea .............................................................................................................................. 8

Lupin ..................................................................................................................................... 9

Lentil ................................................................................................................................... 11

Financial News ...................................................................................................................... 12

Australian Pulse Market News – June 30

th 2013 of 12

www.pulseaus.com.au

Australian Pulse Market News

World markets The vagaries of international demand for food commodities make forecasts difficult to prepare and then precarious for growers to act upon, whether it be sowing or marketing options.

Events around the world in the last 2 years have made reading market signals even more difficult.

The global currency crisis, the drought in Western Europe and civil unrest in the Middle East have all had an effect in individual markets but together have distorted the usual market trends for field pea, lentil and chickpea.

As an example, in early 2011, Turkey, the United Arab Emirates (UAE), and Egypt were the largest buys of Canadian Lentils, taking over half the stocks on offer. By late 2011 the tonnage purchased had dropped to around 35%. Much of this was resold after defaults by the initial customer. This had the effect of reducing demand for lentil, increasing stocks above the forecast level for that time of the year and depressing prices. As the 2012 sowing season began, unsold lentils remained in grower storages, far more than was desirable.

In 2012, Indian pulse production dropped due to dry conditions, and Canadian lentil exports found a new home in India and Bangladesh. Half of all lentil exports went to the sub-continent. Lentils stocks began to decline once more and the pricing for lentil improved accordingly.

For Australia growers, the good news is that demand for Canadian red lentil is now outstripping that for green lentil. Currently, Canadian processors are paying more for Red lentil than for Green lentil. Red Lentil stocks are forecast to be low at around 11% by July, approximately 5 weeks supply. Green lentils stocks should have about 6 months supply.

This is important for us as the Australian lentil crop is mostly red and the increased demand is strengthening the market locally. It is apparent that demand for the newer varieties of red lentil has also been caught up in this change. For the 2013 season, grower confidence in the profitability of all red lentil varieties should be high.

In Western Europe, dry seasonal conditions caused a fall in faba bean production. For the second year in a row, French export potential into the Egyptian market was low. This had the effect of buyers turning to the Australian market to secure supplies as quickly as possible after harvest. The strong demand and improved prices caused a sell-out of faba beans in Australia.

The European drought also caused a rise in demand for animal feed stocks. Demand for lupin increased, principally out of Western Australia and prices increase substantially to around A$300 per tonne FIS. The North American drought caused a drop in soybean supply. This also was a cause of the improved demand for lupin as soymeal prices increased.

Adapted from commentary by Brian Clancy, Saskatchewan Pulse Growers Market Report April 2013


th 2013 of 12

www.pulseaus.com.au


India The Indian government has signalled there will be no change to the duty exemption for the import of pulse grain for the coming year. In the past, the import duty has been 5% but this only added to the high cost of pulse grain, which is the staple for food for most of population.

With India annually requiring up to 4 million tonnes of imported pulse grain, this is seen by the trade as a positive signal.

There will be some funds used by the government to encourage domestic production of pulses, but this is viewed as long term strategy.

The Indian Ministry of Agriculture has forecast the production for pulses in India for the Rabi season to a high of 12.1 million tonnes, a rise of 1 million tonnes from earlier forecasts. Desi chickpea production is forecast to be a record 8.6 million tonnes.

The area sown to pulses is similar to 2012 at 36.7 million acres (14.8 million hectares).

Imports for the year look to be about 3 million tonnes, with the major pulse import being Canadian Yellow pea, the cheapest pulse available on the world market.

Based on information by G. Chandrashekhar, The Hindu Business Line February 2013

The Indian domestic pulse production is subject to seasonal conditions and even if a record crop is produced, there will be a deficit of supply. The outlook for Australia export potential to India, principally chickpea, remains strong.

For Australian growers, the India will continue to be our major customer.

India Pulse sown area- hectares

India’s current and emerging Pulse Situation Monsoon forecast: In late April, the India Meteorological Department announced a preliminary forecast of a "normal" southwest monsoon for 2013. However, we will have a better idea of the accuracy of this forecast in early June, when the May weather conditions can be fully taken into account. A southwest monsoon is also currently set to break over the southern coast of the Indian peninsula around June 3.

A normal southwest monsoon brings about 88 centimetres (cm) of rainfall across the country. However, spatial and temporal distribution of rain will have a bearing on crop yields and production, particularly in crops with limited irrigation potential. The early June forecast will give a better indication of broad regional distribution of rains.

Pulse target: The Government of India has indicated a production target of 19 million (M) tonnes of pulses for 2013/14 covering Kharif (summer season-June/July planting and September harvest) and Rabi (winter season-November/December planting and February/March harvest).

Specific targets for Kharif and Rabi seasons and crop targets are not yet available. However, a target of 7M tonnes for Kharif and 12M tonnes for Rabi can be safely assumed according to past trends. Seed availability for the 2013 Kharif season is said to be satisfactory.

That being said, the Government of India's May 3 advanced estimate of crop production further raised the pulse crop production target for 2012/13 to 18M tonnes. This is marginally below the year's target of 18.2M tonnes, but 900,000 tonnes more than the 17.1M tonnes harvested in 2011/12. The current year's output is the second highest on record after 18.2M tonnes achieved in 2010/11.

Rabi pulses have now set a new production record at 12M tonnes, while Kharif pulses is set at 6M tonnes. Disaggregated data show chickpea production reached a new high of 8.5M tonnes, up 800,000 tonnes from

2012 2012/13 2011/12 2010/11 2009/10 Average

Pulses 14,813,000 14,742,000 15,112,000 13,735,000 14,600,500


th 2013 of 12

www.pulseaus.com.au


the previous year. Other pulses such as green mung bean, black matpe, lentil, etc., account for the remaining 3.5M tonnes.

India's pulse crop production seems to have broken the 14.5M tonnes barrier and gone on to the higher level of 17 to 18M tonnes. At the same time, demand has also been rising, with a growing consumer population and rising incomes. So India will continue to be a large importer of pulses in order to meet domestic shortfall.

Although the Indian crop year is October to September, Indian foreign trade data is maintained on financial year basis (April to March). Pulse imports were aggregated at an estimated 2.9M tonnes in the first nine months of 2012/13. For the whole year, imports are projected at 3.4M tonnes, nearly unchanged from the previous year.

Demand and prices: A rebound in Rabi pulses production, combined with a record chickpea harvest, has resulted in a softening of prices. Chickpea is traded at approximately 33,000 — 40,000 Indian rupees (A$629 — $762) per tonne, with a downward bias.

Household and institutional consumption of pulses picks up and peaks from August to November, when a series of festivals are celebrated, culminating in Diwali (a five-day Hindu festival that will take place in November this year). This year, consumption demand is likely to be advanced by several weeks because of Ramadan which begins in July.

Indian yellow pea imports are likely to continue at about 150,000 tonnes/ month over the next four months because of relatively attractive prices and the cost-effective option for consumers to blend low-priced yellow pea flour with chickpea flour. Lentil imports have picked up some momentum to meet local shortage and firming prices.

Overall, India's aggregate monthly pulse imports are likely to be in the 200,000 to 250,000 (2.4M to 3M tonnes annually) range until September, when the next harvest is due.

Crop diversification: In February, the Indian government proposed spending 5 billion Indian rupees (approximately A$103 million) to implement crop diversification programs in states that favour grain mono-cropping cycles. This would encourage farmers to go for crop alternatives such as oilseeds and pulses.

G. Chendrashekher is the Associate editor of The Hindu Business Line, an Indian business daily. He specializes in agriculture, agribusiness, commodity markets and international trade and development.

Source: Saskatchewan Pulse Growers Pulse market Report June 2013

Canada Very wet and cold spring weather across Canada and the northern United States hampered seeding of pulses. Most reports indicate seeding was around 3 weeks later than desired. It appears all of the intended areas of field pea, lentil and chickpea have been sown, but the yield potential is only being pegged at average. Additionally, wet soil conditions may affect growth and yields if the summer growing period is wetter than average. Current reports suggest that despite the development stage of crops being behind schedule, the condition of crops is generally rated as excellent.

Yield potential reports in the coming months will be important to review to assess the stocks of pulses emanating from North America.

The following tables, compiled in April, show the supply demand forecast for Canadian chickpea and lentil for the coming year.

The important points to note include

Chickpea production centres on small kabuli types

Chickpea production is small by comparison to that of Australia.


th 2013 of 12

www.pulseaus.com.au


Yellow pea is Australia’s main competitor into India for chickpea. Stocks are forecast to rise

Other pea types pose no threat to Australian field pea exports

Red lentil ending stocks are forecast to fall substantially

The forecasts are based on average yields. Seasonal conditions need to be monitored to update the production targets.

Supply and Demand Estimate for Canadian Chickpeas in 2012/13 & 2013/14

Desi Kabuli Small Kabuli All Chickpea

Area (hectares) 2012/13 1,969 67,323 9,449 78,740

2013/14 2,756 53,150 13,780 69,685

% change +40% -21% +46% -12%

Production (tonnes) 2012/13 3,000 134,600 19,900 157,500

2013/14 4,000 96,000 24,000 124,000

% change +33% -29% +21% -21%

Exports (tonnes) 2012/13 2,050 46,100 7,950 56,100

2013/14 2,500 59,000 13,200 74,700

% change +22% +28% +66% +33%

Ending Stocks 2012/13 500 50,500 3,000 54,000

2013/14 800 44,700 4,800 50,300

% change +60% -12% +60% -7%

Supply and Demand Estimate for Canadian Field Peas in 2012/13 & 2013/14

Yellow Green Other All Peas

Area (hectares) 2012/13 1,141,732 157,480 15,748 1,314,961

2013/14 1,121,654 255,906 13,780 1,391,339

% change -2% +62% -13% +6%

Production (tonnes) 2012/13 2,474,300 327,500 27,900 2,829,700

2013/14 2,515,300 602,200 29,500 3,147,000

% change +2% +84% +6% +11%

Exports (tonnes) 2012/13 1,806,500 215,800 13,700 2,036,000

2013/14 1,703,000 393,200 20,800 2,117,000

% change -6% +82% +52% +4%

Ending Stocks 2012/13 128,000 5,000 3,000 136,000

2013/14 439,000 115,000 5,000 559,000

% change +243% +2,200% +67% +311%

Supply and Demand Forecast for Canadian Lentils in 2012/13 & 2013/14

Large

green

Medium

green

Small

green

X-Small

Red

Small

Red All Red Other All

Area

(hectares)

2012/13 484,252 25,591 102,362 18,898 355,118 374,016 3,937 990,157

2013/14 315,748 17,717 72,835 21,260 407,087 428,346 3,937 838,583

%

change -35% -31% -29% +12% +15% +15% 0% -15%

Production

(tonnes)

2012/13 753,200 33,000 159,000 29,600 493,000 522,600 5,000 1,472,800

2013/14 480,000 24,000 117,000 38,000 603,000 641,000 4,000 1,266,000

%

change -36% -27% -26% +28% +22% +23% -20% -14%

Exports

(tonnes)

2012/13 388,800 29,500 108,500 84,800 583,400 668,200 4,000 1,199,000

2013/14 456,000 19,000 108,000 30,400 544,700 575,100 4,000 1,162,100

% change

+17% -35% -1% -65% -7% -14% 0.0% -3%

Ending

Stocks

2012/13 306,200 4,300 43,500 4,000 95,700 99,700 1,300 455,000

2013/14 210,000 4,900 32,400 2,600 17,600 16,200 1,500 269,000

%

change -32% +14% -25% -35% -82% -84% +15% -41%

Source: Saskatchewan Pulse Growers Market Report April 2013


th 2013 of 12

www.pulseaus.com.au


Europe French field pea exports have increased in recent months to be ahead of the same rate in 2011/12. With the vast majority being moved within Europe, this rise is not having an effect on Australia’s field pea trade into the sub-continent. As recently as 2010, France exported 76,000 tonnes of field pea to India. None has been exported in the last 2 years.

The French trade to the subcontinent is substantially lower than in 2011/12 due to the dry seasonal conditions in 2012 in Western Europe, with domestic livestock feedstock being the main market. France sold almost 50% of its export peas to India in 2011/12 compared to just 3% in the year to date.

Industry forecasts are for a lower sown area to field pea in 2013 than in 2011. When combined with low end stocks, any reduction in forecast yields will reduce the volume available for export markets, and may cause a shortage within France. This trend to less field pea is being seen in other European countries.

In previous years France has been a large producer and exporter of field pea, most notably in 2010 when over 1 million tonnes was produced.

. France -- Field Pea Supply-Demand Estimates (hectares, metric tons)

2011-12 2012-13 2013-14

Area (ha) 183,400 134,300 141,150

Yield (kg/ha) 3,616 4,222 4,364

Production (MT) 663,200 567,000 616,000

Imports 12,000 11,000 14,000

Carryin 83,000 50,000 20,000

Stocks 758,200 628,000 650,000

Disappearance

Exports 348,690 230,000 247,000

Seed & Food 59,950 62,400 62,400

Domestic Feed 299,560 315,600 318,600

Total Usage 708,200 608,000 628,000

Ending Stocks 50,000 20,000 22,000

Stocks to Use 7.10% 3.30% 3.50%

Source: STAT Market Research based on information from UNIP and France Customs.


th 2013 of 12

www.pulseaus.com.au


Australia Pulse markets

Field pea Field peas are holding their value in international markets with strength in green peas spilling over to yellow peas, where good exports are also being reported from Canada at the moment.

Current exports of peas from Canada suggest that their stocks will be very low to exhausted before the new crop harvest in August.

The current very wet conditions in Canada may adversely affect the yield of yellow peas. Combined with the move to green pea production the end stocks for yellow pea indicates despite a slight increase over last year, supplies will be just adequate to satisfy demand.

Australian domestic prices for field pea have steadily risen since November.

200

250

300

350

400

Field pea delivered Melbourne FIS June 2012 to June 2013

Source: Profarmer


th 2013 of 12

www.pulseaus.com.au


Beans The bullish Faba bean market seen over the past 2 seasons in Australia looks to be continuing with low stocks from the 2012/13 harvest keeping prices at the high harvest level. The recent decline reflects the low stocks available and the lull in demand with stocks adequate for the coming festival season in the Middle East.

Chickpea The peak demand period for Canadian small to medium sized kabuli chickpea appears to be in their autumn (October) shipping period, which coincides with the Australian harvest period.

Last year, Canadian farmers who held chickpeas through the winter were lucky to benefit from India's emergence as a net importer instead of a net exporter of kabuli chickpea. This year, India has a good crop and will be a net exporter, increasing competition for medium calibre kabuli chickpeas.

Australian domestic prices for desi chickpea have declined markedly in the last year, though remaining steady since February.

200

300

400

500

Faba bean delivered Melbourne FIS June 2012 to June 2013

400

500

600

700

Desi chickpea delivered Brisbane FIS June 2012 to June 2013

Source: Profarmer

Source: Profarmer


th 2013 of 12

www.pulseaus.com.au


Lupin It is a commonplace perception that Western Australian lupin prices are largely affected by local seasonal conditions, ie, a drought will drive prices up and a good season will reduce prices. This is true to a degree but ignores the strong international influence on pricing.

Lupins on an export market are priced on a protein content basis against soymeal. To illustrate the degree of this influence, Profarmer has produced this graph. It shows the 4 year Chicago Board of Trade (CBOT) traded value for Soymeal v the Kwinana FIS value for lupin as offered to growers.

It shows the very strong relationship between the trend in soymeal pricing and the trend for lupin pricing offered to WA growers. The trend in soymeal trading is a good indication of the likely trend that lupins will experience for export markets. With around 60 to 70% of the WA lupin crop exported, it is the export value that drives cash price offers and Lupin Pool performance.

Please note: This doesn’t mean that the soymeal Futures price trend is a gauge for lupin pricing. Growers should not try to look into the future for lupin prices via soymeal futures trends. Additionally, any domestic price offered for local consumption for feed or food, may be quite different to the export value.

Australian Sweet Lupin pricing improved significantly during 2012, driven principally by demand in Asia and the EU from the drought in Western Europe. The drought raised the demand for animal feedstock in the region and restricted exports.

Source: Profarmer Feb 20 2013


th 2013 of 12

www.pulseaus.com.au


Maintaining this level of pricing will be dependent on the soymeal market in the coming months. The graph shows the cash price for soymeal declined by US$ 140/ short ton to April and has risen strongly since. This reflects the similar decline in lupin pricing starting in March.

Key points about the future pricing of soybean and soymeal commodities include

Brazil is on track for record soybean production if normal weather is recorded prior to harvest

Global stocks are low after a poor South American and US crop in 2012. A large crop in 2013 may not cause a large depression in pricing

Recent increased demand from China for soybean is seeing up to 30 vessels discharging a week, up from the usual 12 to 15 vessels. Its December import of 5.9 million tonnes is the highest in 3 years. This should place further pressure on stocks

A return to average seasonal conditions in Europe will increase local feed stock supplies and depress the need for importing lupins.

Stocks of Australian Albus lupin appear to be substantially cleared. The stockpile was caused by the large crop in New South Wales in 2010 and has depressed prices since. Domestic consumption as feedstock has been the main reason for this.

Of some concern is the social and political unrest in the key Middle East and North African markets which has already caused problems with lentil demand into the region. To date this hasn’t hampered albus lupin demand.

200

250

300

350

400

Lupin delivered Kwinana FIS June 2012 to June 2013

Source: Profarmer


th 2013 of 12

www.pulseaus.com.au


Lentil Lentil markets are rising with stocks in Canada and Australia declining in the last year. Demand for low grade lentil has been strong into the Indian sub-continent, with the stockfeed industry taking large quantities in Canada. Ending stocks in Canada finished lower than industry expectations.

Demand for red lentil in particular is rising, with a $30 per tonne premium being offered over green lentil. The recent varieties released by Pulse Breeding Australia have now gained a degree of market acceptance which recently hampered grower sales since their adoption.

This acceptance and heightened demand is being seen in Canada where red lentil production is rising while green lentil production is falling. The nett result is a similar or smaller lentil area to be sown in Canada for 2013.

Lentil prices have risen markedly in the last 6 months to be $150 per tonne higher than the early harvest period in 2012. With pricing at current levels, this provides profitability for lentil production in Australia once again.

300

400

500

600

700

Lentil delivered Melbourne FIS June 2012 to Jan 2013

Source: Profarmer

Source Barchart.com, June 19 2013

$US / short ton


th 2013 of 12

www.pulseaus.com.au


Financial News The Australian dollar exchange rate was very stable in the last 12months, with the exchange rate to the US dollar virtually unchanged. In the last few weeks the Australian dollar has weakened and recently was as low as 93 US cents.

The exchange rate to the UK Pound and Euro has also been stable, but there is a trend to a falling value of the Pound and Euro in the last 3 months.

The drop in the Australian dollar value will raise domestic values for grain and may attract some further demand for exports as Australian grain becomes relatively cheaper.

The exchange rate for the Indian Rupee shows a steady exchange rate, while the depreciation of the Japanese Yen has raised the exchange rate to the Australian dollar independently to other currencies.

Copyright© 2013 Pulse Australia.

All rights reserved.

Disclaimer

There is no intention to provide advice on pricing in this publication. Due to the volatility of pulse prices, growers are encouraged to consult with local marketing businesses to obtain up to date pricing information. Acting on a single piece of information is ill advised. To build a depth of knowledge, growers should reference a range of data sources from around the world and from a variety of marketers within Australia. Always cross reference information to determine its importance and accuracy. The information herein has been obtained from sources considered reliable but its accuracy and completeness cannot be guaranteed. No liability or responsibility is accepted for any errors or for any negligence, omissions in the contents, default or lack of care for any loss or damage whatsoever that may arise from actions based on any material contained in this publication. Readers who act on this information do so at their own risk. Consult your adviser before making crop, marketing or investment decisions.

0.4

0.5

0.6

0.7

0.8

0.9

1.0

1.1

£, €

, US$

AU$ compared to US$, UK£, Euro€

US Dollar

Euro

UK Pound

0

20

40

60

80

100

120

Ru

pe

e a

nd

Ye

n

AU$ compared to Japanese Yen and Indian Rupee

Yen

Rupee

Source: RBA

Source: RBA

australian pulse une th market news · 2016. 6. 12. · australian pulse market news june 30th 2013...

Documents