Sept. 9: Smaller Aussie Chickpeas Crop to Create New Opportunity?

Thanks to drought, Australia will produce a much smaller than expected chickpeas crop. What does this mean for chickpeas prices going forward?

Current Sales Position:

We are 100% sold for 2017/18 old crop chickpeas.

We are 15% sold for 2018/19 new crop chickpeas.

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Good morning,

This week we start in Australia where the Land Down Undaa continues to be quite dry. Compared to where desi chickpea prices were a few weeks ago, valued have pulled about $20 USD / MT to now sit at just under $534 USD / MT (or 24.2¢ and 31.9¢ CAD per pound) in Brisbane.

The pullback is namely due to the market pricing in a certainly smaller crop but we might see prices improve a bit again as frosts have killed off a few acres. Considering that hay prices are nearly triple their average price at just under $400 USD / MT, many chickpeas farmers are just going to bale these frosted fields versus trying to wait it out and see if their crops rebound.

For perspective, last year in 2017/18, Australia produced 1.09 MMT of chickpeas. The most recent estimate we’ve seen suggests a crop of just under 616,000 MT. This includes nearly 310,000 MT of desi chickpeas and the rest going into kabulis.

For further perspective, despite the chickpeas import taxes imposed by India, through June 2018, Australia has exported nearly 784,000 MT of chickpeas for the 2017/18 crop year. With such a smaller crop this year, it’s certainly a possibility that the large Canadian chickpea harvest might be able to replace some Australian product. One thing to keep in mind though is that the large majority of the Canadian harvest is of the larger variety, kabuli chickpeas.

Simply put, production estimates continue to fall for the Australian chickpea harvest. More generally, in the Queensland and New South Wales states, the winter crop harvest will be one of the smallest in recent memory because of the drought conditions.

India Increasing Exports

Another country that might also be trying to take advantage of Australia’s smaller 2018/19 chickpeas harvest is India.

With export incentives like a 7% benefit for exporting chickpeas – or chana as they’re called in India – is certainly opening up the door for Indian exports to push deeper into world markets.

And there’s a lot to go around! The final production estimate from the India government put the 2017/18 harvest at a record 11.23 MMT of chickpeas produced. Total pulse crop production came in at 25.23 MMT, also a new record.

This year, total rainfall since June is about 6% below the average for this time. However, India’s 91 major reservoirs hold 32% more than they did at this time last year, and 14% more than the 10-year average. This in mind, total kharif (winter) crop acres in India are about 3% below what they were a year ago.

That being said, chickpeas most feared substitute is still the yellow pea, namely because of its attractive price (read: cheap). But by the Indian government recently confirming the import ban of peas, it is going to push demand back into other pulses, namely chickpeas.

Ultimately though, with the Indian government continuing to provide trade updates very sporadically, most international traders are only purchasing hand-to-mouth. And it’s hard to blame them since it’s impossible to tell what the next government announcement may be.

Chickpeas Harvest Update

In Saskatchewan, the chickpeas harvest is now 30% complete, slightly behind the 31% at this time a year ago.

Last week Saskatchewan Agriculture said that average chickpea yields, at first look, are coming in around 15 bushels per acre. Comparably, StatsCan is estimated provincial chickpea yields at 22.4 bushels per acre, up 2% year-over-year, but 19% below the 5-year average of 27.8 bushels per acre.

This week we’ll get a look at what the USDA is forecasting for the US chickpeas harvest. As a reminder, back in June, the USDA said US chickpeas acreage would increase 7% year-over-year to 618,800 acres.

The big question is if we’ll see the percentage of US acres harvest this year increase back to the average versus the 75.5% seen in the 2017 harvest.

Chickpeas Prices Update

Kabuli chickpea cash prices delivered to Saskatchewan elevators for the week closed at 21¢ CAD per lbs. This is flat week-over-week but down 16% compared to the same time last month as harvest pressures are meeting the market.

Chickpeas Prices

We expect this pressure to continue as we get deeper into the Canadian harvest but most of the market will be looking to the USDA’s production report on Wednesday to give us any sense of a new trend for chickpea prices.

To growth,

Brennan Turner
President | CEO

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306-715-4540 (cell)

b.turner@farmlead.com

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FarmLead – North America’s Grain Marketplace

GrainCents

 

Sept. 2 – Big (But Smaller) Canadian Chickpeas Crop? – Chickpeas Weekly GrainCents Digest

August 31 – 264,000 MT of 2018 Canadian Chickpeas Production

August 26 – Chickpeas Harvest Moving Along – Chickpeas Weekly GrainCents Digest

August 19– Chickpeas Prices Rebounding? – Chickpeas Weekly GrainCents Digest

August 13– Chickpeas Weekly GrainCents Digest

August 5– Chickpeas Weekly GrainCents Digest

About the Author
Brennan Turner

Brennan Turner is the CEO of FarmLead.com, North America’s Grain Marketplace. He holds a degree in economics from Yale University and spent time on Wall Street in commodity trade and analysis before starting FarmLead. In 2017, Brennan was named to Fast Company’s List of Most Creative People in Business and, in 2018, a Henry Crown Fellow. He is originally from Foam Lake, Saskatchewan where his family started farming the land nearly 100 years ago (and still do to this day!). Brennan's unique grain markets analysis can be found in everything from small-town print newspapers to large media outlets such as Bloomberg and Reuters.