China creeps back into the Canadian pea market, but India is still not buying

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Who’s buying, who’s growing, and who’s selling?

Chuck Penner, founder of Leftfield Commodity Research, gave a grain market outlook at the Western Canada Crop Production Show at Saskatoon this week. RealAgriculture’s Atley Hamlin caught up with Penner and asked about the pea, lentil, and chickpea market factors at play for the year ahead.

Starting with peas, Penner explains that China has been a dominant buyer in recent years, buying over 2 million tonnes one year. However, China uses peas for protein and starch fractionation but also for livestock feed, and the price run-up following the 2021 drought in Western Canada priced peas out of the market.

“We’re starting to see some signs that that might start to improve a little bit, because soymeal prices are going higher, so hopefully that’s going to start to improve a bit of demand in the next little bit,” Penner says.

Before China was a main pea buyer, it was always India, so where is India at with needing Canadian peas?

Penner says that India increased some of its own domestic production and increased its Desi chickpea production, meaning they don’t need Canadian peas right now.

“In order to protect their their own farmers from low prices, they’ve basically shut down any kind of pea imports at all. I’m not hopeful for that business to reopen soon. I’ll never say never but not soon,” he says.

Moving to lentils, the markets are tight on supply, Penner says, following strong selling and exports in late 2022. “That means that we’ll have fewer lentils around the second half of the (crop) year, and so that should be helpful (to prices),” he says “But then you also have things related to a bigger Australian crop and bigger Indian crop probably, so that’ll moderate that effect.”

Chickpea stocks are trending to be tight this year, as well, following drought conditions. Supplies have been drawn down with strong demand from U.S. and Pakistan. By the end of this year, Penner says, we will have very few left. This could encourage more chickpea acres for Western Canada, he says.

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