Canada: Pulse acres juggled because of Chinese pea tariffs

Farmers are likely doing some pulse acreage juggling in the wake of China’s 100 percent tariff on Canadian peas.

“There’s a pretty good chance we will see some pea acres get lost,” LeftField Commodity Research analyst Chuck Penner said during a recent edition of the Pulse of the Prairies podcast.

“Some of those might get shifted into lentils, especially red lentils if somebody wants to keep a pulse in their rotation.”

Statistics Canada is forecasting 3.52 million acres of peas, a 300,000 acre increase over last year.

That prediction is based off a survey of 8,200 farmers conducted from December 13, 2024, to January 17, 2025, long before China’s tariff was implemented.

Penner believes under the current circumstances farmers will cut back on peas by 400,000 to 500,000 acres.

“The China news has taken the wind not only out of the yellow pea market, but the greens and maples because we really rely quite heavily on China for those two (classes),” he said during the March 27 podcast.

STAT Communications thinks the pea number could fall to 2.88 million acres, a 320,000 acre drop from last year.

STAT believes China’s duties on Canadian peas could spark a “major increase” in Russia’s seedings.

Statistics Canada is forecasting 4.18 million acres of lentils — a tiny decrease from last year — but again, that was prior to China’s pea tariff.

Penner thinks maybe 200,000 acres will shift out of peas and into lentils.

“There are now concerns we could produce too many green lentils,” he said.

Rayglen Commodities Inc. said in a recent markets commentary that the trade is anticipating a significant increase in green lentil acres, particularly small greens.

“This shift is likely driven by lower seeding costs, better yields and fewer grading challenges compared to large greens,” said the broker.

“Red lentil acres, on the other hand, are expected to decline due to disease concerns and lower pricing relative to other varieties.”

Penner said India’s 11 percent tariff on lentils has “almost been forgotten” in the wake of China’s pea announcement, but it caused lentil prices to fall.

India’s tariff won’t shut down trade with that country, but it certainly makes it less lucrative.

The hope is that India’s lentil tariff could be reduced or eliminated depending on pulse production in India and Australia.

Penner does not think that will be the case with China’s pea tariff, because China doesn’t tend to negotiate or back down quickly.

“Past experience with Canada and Australia has been that they kind of stick with it for a while,” he said.

“If we had a Huawei executive in jail somewhere here in Canada, we might have a card to play. But we don’t.”

Penner was referring to Canada’s detention of Huawei chief financial officer Meng Wanzhou, which resulted in China suspending the canola export licensees of Richardson International and Viterra in 2019.

Those restrictions were lifted three years later after Canada dropped its extradition proceedings against Meng.

Penner doesn’t think it’s a coincidence that China opened its market to Ukrainian peas just prior to announcing the tariff on Canadian peas.

Russia has already made huge inroads into that market, accounting for 46 percent of the country’s pea imports in 2024 compared to Canada’s 43 percent.

“We’re not the only show in town anymore,” he said.

While Penner does not expect China to reopen its doors anytime soon, nothing is off the table in today’s wonky global trade environment. If that happens, things could get interesting.

“If you’ve had a bunch of people move out of growing yellow peas and suddenly China is back in, then it’s kind of, ‘oh boy, now what?’”

Sergey Pluzhnikov, head of Russian Pulses Analytics, said if the Chinese market remains closed almost one million tonnes of Canadian peas will be looking for a new home in markets like India, Bangladesh and Pakistan.

But those can be difficult markets to do business.

“In Pakistan, everything is rarely paid, and in Bangladesh, the unloading process is often delayed, resulting in an increase in the cost of delivery,” he said in a translation of a recent column he wrote.

Pluzhnikov also noted that Kazakhstan harvested an excellent crop of both red and green lentils and that product is being trucked directly to processing plants in Mersin, Turkey, where it is displacing Russian supplies.

Meanwhile, farmers in the United States intend to plant a record 1.22 million acres of lentils this year, which will be mainly greens.

STAT thinks that could result in total supplies of 692,000 tonnes of the crop, up from 572,000 last year. Carryout could climb to 190,000 tonnes from 120,000.

U.S. farmers intend to plant 913,000 acres of peas, down from 995,800.

Total supplies are forecast at 858,000 tonnes, down from 1.04 million tonnes.

“This would be the first time they were under one million tonnes since 2013,” said STAT.

Tags: acreage, tariff, pulse, lentils, peas, China, Canada