PULSE MARKET UPDATE - JANUARY/FEBRUARY 2020

THE MARKET VALUES FOR PULSES HAVE FIRMED AND REMAIN STRONG …

Roger Vickers, Chief Executive of PGRO, comments on pulse crops ...

The market values for pulses have firmed and remain strong. Postharvest, there was talk about the potential for increased volumes to depress the market values and, indeed, values have fallen from the levels seen in the late springtime of last year, levels not seen previously.

However, the slump in values that might have been predicted has not materialised as they have stabilised at significantly higher levels than they were two or even three years ago. Perhaps concerned about their own farm saved needs for spring, growers are not engaged with the market and seem reluctant to sell most grain commodities at present - and this includes pulses.

The very wet autumn significantly disrupted the drilling of all winter-sown crops and it is thought that there are fairly few winter bean crops sown. The question all are asking is how big will the spring sown pulse crop area be? Seed availability does not seem to be a problem and many are forecasting a significant uplift in spring-sown pulses.

The bean crop competition from the Baltic countries of Latvia and Lithuania delivered better quality than the UK, but appears to have been short on volume and they were early sellers.

The buyers in Egypt are now turning to UK sourced materials, some taking what would normally be feed grade beans and raising their limit on insect damage up to 20%.

The Australian crop appears to have delivered less than was anticipated at around 300,000 tonnes with sellers holding on to try and realise the values they achieved in 2019. However, shipments are now underway which will likely put a ceiling on the current values for UK bean produce.

There remains EU feed bean interest which continues to be supplied. BREXIT uncertainty has, at least in the short term, been resolved by the general election and the passing of legislation. We now enter the certainty of the transition period with the looming uncertainty of not knowing what the trading relationship will be at the end of the year. It is worth repeating that WTO tariffs are 0% on Peas and just 3.2% on beans.

Lewis Cottey, President of Pulses UK, reports on UK pulse markets…

Feed Beans

Feed bean values have firmed about £16/t since Christmas. They are currently around £200/t ex farm.

The price of feed beans is currently too high for most domestic buyers, now accessing more competitively priced soya or rape meal. The value of feed beans is therefore potentially being held up by the reluctance of growers to sell and the demand for beans in Egypt. They are essentially gravitating to the highest value market - effectively leaving the UK feed buyer without supply.

Demand from aquaculture continues, but at an ‘essential’ level due to relative feed values.

If prices firm another £10-£15 per tonne it is likely that buyers may switch to imported peas as an alternative. These are currently valued at around £205/t port side.

Human Consumption beans

With top quality beans hard to find, the trade is making decisions where possible to work with economically viable lots to improve the quality using needle and colour sorters.

Top quality beans for human consumption can command up to £255/t ex farm, and depending upon the visual quality of each batch, values for other lots sit between this and the feed stock price.

The outlook for prices for human consumption appears to remain stable. Ramadan - a peak consumption period – is early this year and with availability from other sources apparently limited buyers have few choices available.

The Sudanese market is now closed as shipments need to arrive and clear customs before the end of February.

Combining Peas

The market for peas seems to have been driven lately by the miconizers, who have been buying more heavily recently, hence free market peas are becoming harder to source. Merchants are now starting to think that the national crop size may have been over estimated. However, as with beans, grower reluctance to sell may be playing a significant part.

Contracts for all pea types for crop 2020 remain available. Likely values are shown below though different buyers offer different terms and conditions presenting opportunity for variation.

Marrowfat peas

The value of any free market / off contract peas is totally guided by the colour and cooking results, the range is likely to be between £270 and £315/t ex farm, which is considerably lower than the current contract values enjoyed by the old crop at up to £380/t.

2020 crop contract values are min / max £300-320/t ex farm.

Blue Peas

Canadian produce has risen in value which is supporting firmed prices since the beginning of January. Again, the very best quality is essential to realise the highest prices. The range is likely to be £225 - £290/t ex farm.

2020 crop contract values are min / max £225 - 275/t ex farm.

Yellow Peas

The limited UK domestic split pea market is niche and stable with values being paid around £205 - 210/t ex farm. Total demand remains low at present.
2020 crop contract values are min / max £200-250/t ex farm.

Maple Peas

The market prefers the variety Rose, but there appear to be none available. Other varieties are likely to be worth around £320/t ex farm.

The next Pulse Market Update will be February/March 2020