Canada: Chickpeas could help make or break pea market

 The yellow pea market hinges on one key factor this year, says an analyst.

“The outlook is 80 per cent political, 20 per cent fundamental,” said Greg Kostal, president of Kostal Ag Consulting.

India has been a major player in the market, importing 1.85 million tonnes of yellow peas between January and May 2024, according to the Global Pulse Confederation’s (GPC’s) recent Pulse Atlas report on yellow pea prices.

However, the country’s temporary exemption on pea import duties is set to expire Oct. 31, 2024.

“For (the market) to move higher, you’re going to need to see an extension of that tariff (exemption),” said Kostal.

“Otherwise, I think we’ve seen the highs for the year.”

The policy measure was implemented to help control desi chickpea price inflation, but that crop continues to rally while most other pulse prices are falling in India, including yellow peas.

That is creating a real conundrum for the Indian government.

There are a couple of market factors that could help influence India’s looming policy decision.

Australia has a bumper desi chickpea crop on the way that could help alleviate India’s shortfall of the crop.

“Chickpeas are looking phenomenal. Every farmer and his dog has put chickpeas in,” Umang Bagaria, founding director of Mandala Trading, said in a recent GPC article.
“If you’ve been hearing 1.5 or 1.6 million tonnes, I wouldn’t be surprised if it is two million-plus. It’s exceptionally good.”

That would rival the record two million tonne crop produced in 2016-17 and far exceed the government’s latest 2024-25 estimate of 1.1 million tonnes.

Australia’s crop is harvested in the October through mid-December period.
“You know darn well Australia is going to be tapping into that (Indian market) and bombing out as much as they can,” said Kostal.

AgPulse Analytica is forecasting 1.35 million tonnes of exports, solidifying Australia’s position as the world’s leading exporter of the crop.

That is based on AgPulse’s forecast for 1.52 million tonnes of production, which is well below Bagaria’s prediction.

“We expect a demand of nearly 700,000 tonnes from India in the current policy window, and the remaining 650,000 tonnes destined for the rest of Asia,” AgPulse said in a GPC article.

India’s duty-free period for chickpeas ends March 31, 2025, and it takes 60 days to transport the crop from Australia to India.

“That gives you basically November, December and half of January to export the crop to make sure it gets there in time,” Nick Crowley, pulse trader at CL Commodities told GPC in another article.

“So that’s going to be a hectic period.”

Canada’s yellow pea exports to India tend to soar when the country is short of desi chickpeas, so any surge in Australia’s desi exports to that important market could stifle yellow pea demand.

India’s pea demand has slowed of late after a torrid stretch of imports following the December 2023 tariff exemption announcement.

The slowdown has led to a nearly $100 per tonne drop in average Canadian CNF yellow pea prices for that market in August compared to May.

“Similarly, prices for Russian yellow peas are also slowly going down as global yellow pea markets begin to normalize after India’s buying spree at the start of the year,” according to the Pulse Atlas report.

It expects that ample global new crop pea supplies will likely exceed demand for the crop in 2024-25.

“The trade expects a continued downturn in prices (if there is) no further import extension from India,” stated the report.

Kostal agrees. Peas would have to find another home, but China is the other big buyer and demand from that country is “waffling” of late.

Bangladesh is a possibility, but it might take 500,000 tonnes of the crop from all suppliers, so that wouldn’t come close to filling the gap left by India’s exit.

Russia has emerged as a top competition to Canada in the pea market. Farmers in that country increased their acres by 11 per cent this year.

“(But) the gains in acreage have been somewhat canceled out by adverse weather conditions,” AgPulse analyst Gaurav Jain said in a recent article he wrote for GPC.

“Pea crops in the country endured multiple weather issues this season, from dryness to frost to rains.”

AgPulse expects yields to be 18 per cent lower than last year, resulting in total production of 4.25 million tonnes, a 10 percent drop.

There are very few old crop peas left in Russia’s pipeline, so exports are expected to be 2.45 million tonnes in 2024-25, down 27 per cent from last year. That bodes well for Canada.

Russia can no longer ship peas to the European Union due to prohibitive duties, so its crop will be heading to markets such as China, India and Turkey, according to Jain.

Tags: Market, yellow pea, prices, Canada, India, chickpeas