PULSE MARKET UPDATE - NOVEMBER/DECEMBER 2019

IN GENERAL, UK YIELDS HAVE BEEN GOOD ...

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

With the harvest behind us it is clear that there have been mixed blessings. In general, UK yields have been good - and though the quality of the bean crop in the more northern regions has been better than the south - there are relatively few sellers of top quality whole beans. Peas harvested well and there has been a wide range of quality arriving on the market, meaning that there is some significant difference in crop values.

The wet autumn has 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?

Demand from growers is reported as very high. The updated November Early Bird forecast is already predicting the pulses area to rise by 24%. The same survey for crop 2019 forecast a drop of 8%. Whilst beans fell 11.4% (to 134.7k ha) and peas rose 7.6% (to 40.2k ha), the overall drop was 7.7%. The trade is welcoming a potentially larger crop from 2020 with optimism.

The bean crop competition from the Baltic regions of Latvia and Lithuania appears to have delivered better quality than the UK and is taking priority with the buyers in Egypt. This is ahead of the arrival of the Australian crop which some are suggesting is 40% up on 2018 at around 340,000 tonnes and is being harvested now.

BREXIT uncertainty is affecting the short-term decisions of some more local EU buyers. However, with WTO tariffs of 0% on Peas and just 3.2% on beans, it is widely felt that this is unlikely to significantly affect demand. The UK remains the primary producer of faba beans and is the leading supplier of quality green peas and marrowfat peas for which the market demand is strong. Green pea exports with BRC accreditation to EU destinations have a local advantage over Canadian or New Zealand sources.

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

Feed Beans

Feed bean values remain fairly static, hovering around £180/t ex farm. Demand throughout the autumn period has been primarily from export feed buyers and significant quantities have already been shipped. UK domestic buyers were unable to secure continuity of supply commitments in the late summer, and in the face of what were then substantially higher values and few forward sellers, they made commitments to alternative mid protein sources at significantly lower values. This has until now put them out of the domestic bean market for the early part of the winter.

Looking ahead, demand from aquaculture continues to develop and feed beans are increasingly in demand in Europe, particularly in the south.

New export markets are beginning to emerge for beans in human consumption, opening further opportunities for the future.

Human Consumption beans

With top quality beans harder to find, there is little export business to the traditional buoyant Egyptian market at this point. The Sudanese market has been active, and as the produce is delivered in containers, there is the opportunity for small parcels to make the grade and achieve up to £220/t ex for good quality spring beans with less than 5% bruchid damage.

Growers with good samples holding on for a better market should bear in mind that the Sudanese close their market to imports from the end of February to protect domestic markets. Shippers will need to complete by mid-Jan to ensure arrival and customs clearance is achieved in time.
Winter beans can also make the grade for human consumption, but this is a visual market as far as quality is concerned and winter beans tend to present a more ugly, unappealing sample. A good winter bean sample might fetch £205/t ex.

Combining Peas

The market is now quite static as it has been based on pre-harvest contracts. There are relatively few immediate buyers for crops grown on the open market at present.

In the final post-harvest reckoning it appears that the later harvested peas produced a poorer sample caught as they were in the catchy harvest of mid-august onwards. This means that there is a significant variation in values between the best and the worst.

Marrowfat peas

There is almost no free market trade at present. Nominal values might be around £320/t ex for a good quality, free soaking, unbleached sample. Growers looking to the spring should think carefully before growing off contract. This is a niche market.

Blue Peas

Open market large blue / green peas are trading at between £175/t ex farm for feed quality samples and £270/t for top grade export quality.

Yellow Peas

These peas are gaining a lot of exposure due to their use in the pea protein extraction process, a market that is expanding rapidly, though as yet there is no UK-based facility for this.

The local yellow / market remains niche and largely produced on contract, mostly for split peas. There is a premium over feed and £210 /t ex would be a reasonable expectation.

The next Pulse Market Update will be January 2020