At a glance

Here’s what Ron has to say:

The market outlook for pulses needs to be seen from two aspects: Long term (10 years+), and Short term (the next 12 months).

Long Term – to 2025 and beyond is POSITIVE:

• The theme is very positive for pulses; it is a consumer story and about changing behaviours
• There is a transformation taking place in the way we think about food
• There is focus on health, nutrition, affordability, sustainability, provenance and environment - these themes play perfectly into the pulse story. The pulse message is simple and believable
• The western world millennials (18-34) are foodies, on social media, and are fans
• The key drivers for food change are: must taste good, nutrition benefits, health benefits, and also deal with their fears (obesity, cancers, affordability, sustainability)
• The IYP 2016 legacy will be World Pulse Day and “Half Cup Habit” (campaign for diet to include half cup per day of pulses, somewhere in the diet, either cook & eat or as an ingredient)
• In addition, there is growth in animal and pet food requirements for plant protein and other industrial and food ingredient uses of pulse fractions.
• The sense is that we are at the start of a longer term global trend and change in consumer habits
• It’s an exciting prospect for pulses.

Shorter Term – 2017/18, is expected to see some price volatility:
• We are coming out of two poor seasons in both India and Pakistan, which are the major buyers of Australian chick peas and lentils.
• The coming 2017/18 season looks more normal with average monsoons to date and therefore likely lower import demand.
• New exporters from Russia and Ukraine are emerging.

The roundup of market direction by commodity was:

• Lentils have been one of the star performers for Australian farmers in 2016/17.
• While area planted in 2017 is steady to higher, the yields are expected to return to normal with exports falling in line with lower production.
• Canadian red lentil 2017 production is under pressure with hot weather, with production estimated at 1.8mmt vs 2.5mmt in 2016.
• Expect better quality Canadian crop in 2017.
• Aust crop to decline from 2016 of 7-800kt to 4-500kt.
• Possible lower Indian rabi plantings in late 2017 (wheat prices more attractive to Indian farmer).
• Prices stable to slightly lower, largely dependent on outcome (Aug/Sep) of Canadian crop and the speed of importers to work their way through current pipeline stocks.

Chick Peas (Desi and Kabuli)
• Another star performer for farmers and exporters in 2016/17.
• Area planted in Australia is steady to higher in 2017, but average yields, if achieved, will see a crop more like 1.3- 1.5mmt.
• India desi production will depend on monsoons and their planting in Oct/Nov, but under “normal” conditions, we could expect lower imports in 2017/18.
• Pakistan imported 400kt from Australia in 2016/17. Subject to an average local crop in Pakistan, this could be expected to drop to 100-200kt in 2017/18.
• If these “average” conditions do eventuate in Australia, India and Pakistan over the last half of 2017, we can expect desi chick pea prices to ease as we approach the Australian Harvest – remembering that we have seen decile one chick pea prices in the A$700-1100 range over 2016/17..
• Kabuli Chick Peas have had very tight supplies, and record high prices in 2016.
• Expect production to respond in 2017, but at faster pace in 7-9mm, larger size may take longer.
• Supply to grow from Mexico, India, USA, Turkey, Russia, Argentina.
• Demand is steady from South Asia, EU, Middle East and North Africa.
• USA (a Kabuli exporter) 2017 production is under pressure with the extreme hot weather in July in Montana/Dakotas.
• CIF prices to India were quoted at USD1300, with no-one prepared to predict when these levels might ease.

Field Peas
• Major production increases over 2012-2016 period in Canada, USA, Russia.
• Major Indian production fall in 2016 (weather).
• Recent growth in 2016 demand from India (weather), China, and Bangladesh.
• “New” demand appearing from petfood trade for plant protein and pea fractionation for flour ingredient.
• Pea prices have stayed low to date in 2017, but likely to be dragged up by recent wheat price surge and some switching of feed protein demand to peas.
• Current Canada values sees pea protein at 50% cost of soybean meal.
• Australia 2017/18 production estimated at 300-350kt, with expected strong domestic demand from feed industry due to rising prices of protein soybean meal

Faba Beans
• Australian domestic demand in 2016 estimated at 100-120kt.
• Expect 3-400kt 2017 crop, but like field peas, the demand for protein in the local feed market is expected to flow over to faba beans and see prices firm to higher in 2017/18.



– The above market and price direction comments are the “combined wisdom” of those at the GPC Conference on 10-13 July 2017.
– As always, the nature of pulse markets with so much depend on weather in both exporting and importing countries still to play out, means we should expect volatility as these events unfold over the balance of 2017.
– Notwithstanding the normal seasonal variability, the underlying long term structure of pulse markets looks strong. Look out for the “Half Cup Habit” to hit your kitchen in the coming 12 months!