Russia’s 2019 Pulse Harvest
GPC reports on the country’s recently harvested pea and chickpea crops.
In 2017/18, Russia emerged as a major player in the global yellow pea trade. According to UkrAgroConsult, it harvested a bumper crop of 3.28 million MT that campaign and exported a record 1.58 million MT. Since then, however, its exports have fallen short of that high mark.
In 2018, despite record seedings, pea production decreased due to dry conditions in the key growing area of southern Russia. This year, the pea area was kept in check by high wheat prices.
Russia’s pulse crops are typically seeded in April and harvested from late June through mid-August. Cem Bogusoglu of GP Global Group, a Geneva-based trading company, and a member of the GPC executive committee estimates this year’s production at 2.2 to 2.5 million MT. In the absence of official government figures, Bogusoglu relies on the information he gleams from talking to suppliers and growers. For a clearer picture of the situation on the ground, he put GPC in touch with Ivan Basov, the trade manager at Top Grain, one of Russia’s first pea exporters.
Basov reports that the 2019 pea crop was seeded and harvested in a timely fashion, and there were no major weather issues. In southern Russia, yields were perhaps slightly higher than last year, and the quality of the overall crop is good.
Even so, Basov does not believe Russia’s pea exports are likely to replicate 2017’s levels this year or anytime soon for that matter. To understand why, one needs to delve into the changes that have transformed Russia’s pea industry over the past decade.
What Drove Russia’s Pea Boom
Top Grain began exporting dry peas from Russia in the mid-2000s. At first, its business consisted mainly of feed peas to Italy, and then to Turkey and India.
“At that time, it was a niche product in Russia,” recalls Basov. From 2008 to 2010, Russia’s annual pea exports amounted to about 200,000 MT, he says.
The situation began to change when the financial crisis of 2014 hit. The Russian ruble suffered a drastic devaluation and conversely the value of the U.S. dollar doubled. This allowed companies in the meat sector to grow to giant proportions, which in turn dramatically increased the internal demand for feed peas.
“Russian meat companies were paying as much as $35 USD/MT above the export price, and this completely changed pea trading,” says Basov.
In response, Russia’s farmers ramped up pea production and produced enough not only to meet internal demand, but also to drive exports to the record high of 2017.
Peas have since become a fixture in the crop rotations of Russian farmers, who value them for their nitrogen fixation properties and, additionally, because they have come to realize that peas are the best crop to plant following sunflower.
Production, therefore, is likely to continue to trend upward, but exports not necessarily so. This is because domestic consumption continues to increase, explains Basov, not only for feed, but also for human consumption (albeit to a lesser extent).
Bogusoglu is of the same opinion: “My expectation is that, with increased prices in Russia for feed, more product will stay in the internal market and we’ll end up with about the same level of exports as the previous campaign, about 500,000 MT.”
2019 Chickpea Crop
Peas are by far the largest of Russia’s pulse crops, but it also produces a sizeable chickpea crop. Russian chickpeas are of the smaller sized types, mostly 6 to 7 mm in caliber, and are almost exclusively produced for export.
This year, Basov says there was likely a reduction in the chickpea area given that many growers still have abundant old crop inventories. Basov is unsure exactly how large these stocks are, but he says some of the bigger farms have as much as 20,000 MT of carryover.
“Growers are holding onto their stocks, waiting for prices to improve,” he says. “Some growers have as much as two-year’s worth of production in storage.”
The chickpea crop is typically harvested about two weeks later than the pea crop. This year, harvest rains slightly affected crop quality, resulting in some bleaching and cracking.
Bogusoglu projects Russia’s 2019/20 chickpea exports at 300,000 MT, give or take 10%. That compares to 350,000 – 400,000 MT of chickpea exports the previous campaign.