PULSE MARKET UPDATE - February 2023

Pulse trading slowed prior to the end of the year and the general impression is, it has been relatively quiet in the UK since.

Pulse prices rose on the back of other commodities to a point at which the domestic feed processors were drawn away in favour of other mid-range protein products and they are only now starting to drift back to the market, with pulse values having been more slow to fall.

That said consumption in exports prior to the end of the year were good (about what would be expected)  although not in the established human consumption markets of North Africa – largely due to the continuing relatively poor economic situation in the region.

Australian crops of beans are now available following a delayed harvest and what now appear to be annual logistical priority issues  getting boats loaded and despatched. Estimates for the crop are enormous, with perhaps 700,000 tonnes having been harvested. This is the third year in a  row the Australian crop has been large and perhaps reflects a new normal. It is nearly double what might have been forecast five years ago. In a year with significant rain there was some suggestion that quality might be an issue, but this has not really emerged. The result is that Southern hemisphere beans now in competing markets at similar values to UK domestic feed beans, adding negative pressure to UK human consumption export opportunities.

Baltic bean productions are apparently held back at a slightly higher price and are presenting less competition to UK production than might have been anticipated.

An unusual situation has arisen which defies clear explanation. Feed peas normally traded at a discount to beans are commanding parity or even a slight premium. This perhaps reflects markets reduced willingness to trade with Russia and reduced availability from Ukrainian sources. That said peas in the UK are almost exclusively grown for a premium in food markets and only a very few of poorest quality would normally head for animal feed.

Potential problems are being flagged with Soya production in Argentina, at present firming price on soya products. This may have an influence upon buyers looking for protein alternatives.

While temperatures are currently low, generally soil conditions look good, and there is optimism to the approaching 2023 sowing period.

UK Pulses

Feed beans
Demand has been and remains slow. Values have been pressed to around £245/t ex farm depending upon location and likely haulage costs. A more normal situation would present a premium of perhaps £25 to £40/t over wheat but at present this is reduced to £10-£15/t at current market values. This suggests that beans might be good value in comparison.
The trade is speculating that, with a larger crop area than had been anticipated in 2022, there remains beans on farm unsold but there are currently few sellers.
Trading of new crop has been slow to get started, with the trade quietly awaiting clarification of the old crop position. Those to sell might be offered a premium of £25/t over November Wheat futures values.

Human consumption bean exports.
There is little demand from export markets and the premium available is a nominal £10/t over feed. Quality available for export was badly affected by the hot conditions in early summer in 2022 and for a change it appears that the southern crops were less affected than those in the north of the country. While Bruchid beetle damage is usually the main criteria of concern for quality, in many cases the 2022 crop did not fill to its potential, often leaving small grain size and generally poor visual appearance. Grains to be eaten whole need to look appealing! Few if any new trades for human consumption exports from crop 2022 are expected.

UK Combining Peas
Feed pea values are on parity with or at a slight premium to feed beans. 

Green peas
Significant quantities of green peas have been moved since harvest and the prices have held up reasonably well as a result. Current values have a very wide range based upon the quality of the sample, from about £290 - £340/t ex farm.
Buyers for micronizing can occasionally twist the market. The volumes used are not insignificant but are relatively small in comparison, and payments are for peas of the highest quality – occasionally putting a false expectation of ceiling in the main market values.
Contracts remain available for 2023 production. Contract pricing options appear to be quite flexible, from minimum - maximum agreements to fixed prices or fully open prices to be agreed. With various agreements on quality clauses to factor in too. A typical fixed price contract might be in the region of £375/t ex farm whereas minimum-maximum ranges present opportunities from £300 - £450/t ex fam depending upon clauses agreed.

Marrowfat peas
There are thought to be few if any open market marrowfat peas available. So a good quality open market samples could fetch up to £600/t ex farm. This is clearly significantly more than the price at which some contracts were agreed before sowing and reflects the disturbing geopolitical changes that have brought so many changes since.
Contracts for crop 2023 have been taken up in larger numbers with opportunities for up to £570/t ex farm with clauses for quality. While the trade would still take more contracts seed availability is now limiting opportunities for those who are not already signed up.

Yellow peas
With few open market yellow peas about the values are considered almost nominal £310-£330/t ex farm might be expected.
Contracted area continues to expand from a very low level, with relatively strong demand from growers. 2023 contracts have been agreed at around £350/t ex farm with no bleach clauses.

Maple Peas
Proving difficult to market at present in what is always a niche trade, Mantara has been over supplied to the pigeon market for some time.
Variety Rose, which has of late been the preferred variety for exports to the far east has also hit the buffers, at least temporarily. One of the main uses is in a sticky bun, akin to a donut, and snack food has taken a pounding throughout the covid lockdowns, meaning stocks of Rose are high. It may take some time for this to move through the system, but demand is expected to return.
There are no buyers or sellers at present so values are theoretical, perhaps £350/t ex farm?