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What’s Ahead for Pulses?What’s Ahead for Pulses?

February 2020

Presented by:

Chuck Penner

@leftfieldcr

WHAT WE’LL COVER

Situation in India Just for old time sake

Pea outlook Lentil outlook Chickpea outlook Longer term thoughts

Some good, some bad

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INDIAN RAINFALL – OCT-DEC

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Sharp slowdown from the “boom years”

Early rabi season, most of the country got heavy rain

INDIAN RAINFALL – JAN-FEB

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Late season, eastern half got heavier rain

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INDIAN VEGETATION INDEX

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Main lentil and pea area

PLANTED AREA – RABI PULSES

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Sizable increase for chickpeas, small reduction for others

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AGMIN ESTIMATES – RABI PULSES

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Likely on the conservative side

PULSE CROP ESTIMATE & TARGET

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Short of target, but…

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CANADIAN PEA PRODUCTION

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Larger % increase for greens & others

BLACK SEA PEA PRODUCTION

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Smaller crops, fewer exports

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US PEA PRODUCTION

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Second largest crop on record, 30% greens

PEA IMPORTS -- INDIA

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Officially, anyway

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RABI PEA PLANTING

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Fairly close to average

PEA IMPORTS -- CHINA

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Still very strong

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CANADIAN PEA EXPORT PACE

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Well ahead of last year

STATSCAN DEC 31 DOMESTIC USE

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Not a clear estimate, but no noticeable gains yet

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CANADIAN PEA ENDING STOCKS

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Not heavy by any means

PEA PRICES – INDIA & CHINA

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India detached from global market realities

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CANADIAN PEA BIDS

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Subdued new‐crop bids

CANADIAN PEA SEEDED AREA

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Flattish acreage

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PEA OUTLOOK

Quality concerns, especially for greens China strong demand Poor Indian demand outlook Moderate ending stocks for 19/20 Could tighten up a bit more, giving more price

strength Steady(?) acres for 2020

Lower supplies with smaller carry-in

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CANADIAN LENTIL PRODUCTION

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Smaller green crop, red up

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US LENTIL PRODUCTION

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Mainly med greens

INDIAN LENTIL PLANTING

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Average but below last year

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LENTIL PRODUCTION & YIELD -- INDIA

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Could be overly optimistic  unless there are unreported acres

TURKISH LENTIL PRODUCTION

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Two years of low production

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INDIAN LENTIL IMPORTS

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In spite of 33% import tariff

CANADIAN LENTIL EXPORTS

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3‐way tie for reds between India, Bangladesh & Turkey

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WEEKLY CANADIAN LENTIL SHIPMENTS

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Excellent movement lately

SELECTED RED LENTIL PRICES

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More Cdn reds arriving

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CANADIAN LENTIL ENDING STOCKS

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Tighter for both, espwith quality issues

CANADIAN LENTIL BIDS

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Turning lower. Is that it for 19/20?

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CANADIAN LENTIL SEEDED AREA

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Small increase, might be conservative

LENTIL OUTLOOK

Quality concerns, more so for greens Increased demand from Turkey & India Good Indian crop prospects, harvested within weeks Tighter ending stocks for 19/20 More price strength possible from Turkey Small bump in 2020 acres should be manageable

Won’t weigh on prices unless yields high

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CANADIAN CHICKPEA PRODUCTION

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Smaller 2019 crop, but still big

CANADIAN 19/20 CHICKPEA EXPORTS

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Disappointing, targets have been lowered

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US CHICKPEA PRODUCTION

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More of a drop, but still large supplies

AUSTRALIAN CHICKPEA PRODUCTION

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Will bounce back in 20/21. Mostly desis

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INDIAN KABULI EXPORTS

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Supplies lower in 19/20

INDIAN CHICKPEA PRODUCTION

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Could set new record, mostly desis 

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MEXICAN GARBANZO AREA

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Continuing turnaround

SELECTED LARGE KABULI PRICES

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Reflection of global market environment

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CANADIAN CHICKPEA SEEDED AREA

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One‐third drop, might not be enough of a cut

CANADIAN CHICKPEA SUPPLIES

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Still heavy, even next year

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CHICKPEA OUTLOOK

High prices two years ago caused supplies to spike Taking a long time to chew through supplies

Canadian exports weak

Most countries dropping area in 2020 Might still take another year to finally use up

burdensome stocks Small recovery later in 2020/21

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CHANGING FOOD TASTES

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BURGERS GET ALL THE ATTENTION

A lot more than just burgers Protein imported from China and elsewhere Other proteins eyeing the opportunity

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GLOBAL TRADE IN PULSES

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GLOBAL CROP PRODUCTION

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10-Yr Growth

20-Yr Growth

Area 0.76% 0.76%

Production 1.91% 2.04%

Yield 1.14% 1.28%

Crop 15-Yr Gain (bu/acre) CAGRBarley 5.02 1.6%Corn 8.36 1.7%Rapeseed 4.53 2.3%Soybeans 3.46 1.5%Wheat 5.02 1.8%Pulses 1.15 1.4%

CDN PEA USAGE

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Only growth has been exports

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NORTH AMERICAN PEA DOMESTIC USE

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Growth is more obvious in US

CANADIAN PEA POSSIBILITIES

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Growth in mkt mainly from domestic use

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CANADIAN LENTIL USAGE

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Lentil domestic usage overlooked?

CANADIAN FABABEAN ACREAGE

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CANADIAN PULSE FLOUR EXPORTS

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Steady to US, dropoff to China

RELIANCE ON CHINA – FLAX

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A cautionary tale

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RELIANCE ON CHINA -- PEAS

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Kind of nervous

ONE BELT ONE ROAD

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COMPETITORS’ INVESTMENTS

INDIA’S PULSE PUSH

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ENVIRONMENTAL CONCERNS

CANADIAN CLIMATE CHANGES

On prairies, 15 days longer since 1948

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PROJECTED IMPACTS OF CLIMATE CHANGE

SUITABILITY FOR AGRICULTURE

Global climate‐driven agricultural frontiers 2060–2080

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REQUIREMENTS

Active support from various levels of government Protein Industries Canada, MB Protein Advantage for R&D Competitive environment for economic development

Ongoing market development Industry organizations, CIGI Take page from canola playbook

Markets for byproducts – starch and fibre Healthy balance between exports and domestic Need to know what’s included in “other domestic”

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CONCLUDING THOUGHTS

Still very early in the cycle, hype is outrunning reality Won’t return to “glory days” of Indian pulse demand

Only opportunistic on weather problems

Changing demographics a powerful force Climate as an issue is unquestionable

Lots of ag implications

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THANK YOU!

www.leftfieldcr.com@leftfieldcr