Canada may struggle to find markets for its peas

Canada will likely be facing more competition in pea export markets this year.

Russia’s production is expected to rebound after a disappointing 2024-25 harvest, said Gaurav Jain, analyst with AgPulse Analytica.

He is forecasting 5.01 million tonnes of production in 2025-26, up from 3.92 million tonnes last year.

“Mother Nature was not so kind on Russian peas last season,” Jain told delegates attending the Global Pulse Confederation’s Pulses 25 conference in Singapore in late-May.

Exports are expected to fall to 1.7 million tonnes in 2024-25 from the massive 3.37 million tonne program the previous year when Russia gained access to both the Chinese and Indian markets.

Jain is forecasting 2.43 million tonnes of Russian pea exports for the upcoming crop year.

Rustam Guliev, a trader with Top Grain, thinks Jain’s production forecast is too optimistic.

He thinks the top end will be 4.4 to 4.5 million tonnes, but it could easily be less than that due to drought and frost in some regions.

Jain said growing pulses is becoming increasingly popular in Russia because the crops do not face the same steep export duties as competing crops such as wheat, corn and some oilseeds.

Jain said Siberia is experiencing the biggest increase in pea production due to its proximity to the Chinese market.

Canadian production for 2025-26 is forecast at 2.78 million tonnes, a nine per cent drop from last year, although Jain feels it could fall as low as 2.5 million tonnes.

China’s 100 per cent tariff has reduced profitability of the crop and is causing farmers to reduce acres.

Kevin Price, a trader with Parrish & Heimbecker Ltd., had Canadian pea acres going up three to five per cent before China’s tariff announcement.

He now thinks they will fall 10 to 15 per cent, which is about the limit due to rotations.

The reduction will be in yellow peas, with green peas staying flat or even rising a little.

He noted that Canada produces 350,000 to 400,000 tonnes of green peas in a good year. Other speakers said Russia produces 30,000 to 50,000 tonnes and Ukraine another 50,000.

Jain is worried about Canada’s ability to sell yellow peas due to the loss of the Chinese market, reduced food aid demand from the United States and the possibility that India won’t extend its import duty exemption, which is set to expire May 31.

“For Canada, there are problem areas for the next marketing year,” he said.

However, there are other markets, such as Latin America, South America, Pakistan, Bangladesh and the United Arab Emirates, that can mop up some of Canada’s supplies.

Canadian exports are forecast at 2.05 million tonnes, down from 2.4 million tonnes in 2024-25.

The European Union used to be a big pea importer, purchasing 802,000 tonnes of the crop in 2023-24, which was largely supplied by Russia.

That changed when the EU placed a 50 per cent tariff on peas from Russia and Belarus starting July 1, 2024.

The upshot is that the EU is now producing more of its own peas and is only expected to import 150,000 tonnes of the crop in 2025-26.

Jain is forecasting 2.3 million tonnes of EU production in 2025-26, but that is at odds with the European Commission’s (EC) estimate of 1.84 million tonnes.

If the EC is correct, the EU will need to import a lot more peas, and that will drive prices in Spain and Italy “sharply higher.”

Ukraine’s production is expected to reach a record 569,000 tonnes in 2025-26, up from 473,000 tonnes in the current crop year.

The country is a major supplier to the EU and recently gained access to the Chinese market.

Exports are forecast at 400,000 tonnes, up from 330,000 tonnes.

On the demand side, China is forecast to import 2.15 million tonnes of the crop, up from last year’s disappointing 1.51 million tonnes.

Domestic usage will be far below the record 3.93 million tonnes of 2023-24 as China adjusts to losing its pea supplies from Canada.

Zhang Baosheng, a trader with the Snandong Sunshine Vermicelli Co., expects China’s domestic processing demand to drop 20 per cent due to the tariff.

However, he believes the tariff will be removed next year and demand will recover.

India is the other major global buyer of the crop. AgPulse is forecasting 800,000 tonnes of imports in 2025-26, down from 2.3 million tonnes in the current crop year.

However, that is assuming the country does not extend its duty-free import policy.

If it does extend the policy, that number will climb to between one and two million tonnes, depending on how long it is extended.

“Then Canada would have a home for its peas,” said Jain.

Prasenjit Gorai, a trader with ETG Commodities, believes India will purchase 3.2 million tonnes of yellow peas if the zero duty policy is extended, which he believes will happen.

Tags: Ukraine, China, export, United States, Canada, Production, forecast, Market, demand, yellow peas, pea