PEAS
(India back in YP market until June 2024)
CANADA
1)Canadian farmers decided seeding intentions well before India gave extension of imports of YP until June 2024, however, the improving new crop bids in next few days may have some bearing on Canadian Peas plantings.
2)Industry estimate total Canadian Peas plantings at 3.5 mln acres in 2024 vs 3.048 mln acres in 2023 and below the 5 yr avg of 3.77 mln acres. Majority of acerage shift is expected from Yellows to Greens and Other Types (Maple). The projected plantings will be 2.9 mln acres (Yellow Peas), 0.55 mln acres (Green Peas) and rest other types.
3)The expected 2024 crop production can be summarized as 2.8 mln mts Yellow Peas (2.26 mln in 2023), 0.55 mln mts Green Peas (0.3 mln in 2023) and 0.10 mln mts Maple / Other types (0.05 mln mts in 2023).
4)Canada exported 426,833 mts Peas during Feb 2024 (368,489 in Jan). India as expected took lion’s share with 344,531 mts, followed by Bangladesh at 32,500 mts and China at 18,393 mts.
5)Total peas exports for MY (Aug 23 – Feb 24) have been 2,023,989 mts (vs 1,708,889 mts in last MY). We expect a carry of 150 – 200,000 mts for the rest of the current crop.
6)Canadian Yellow peas track prices jumped to $ 450 pmt DAF Vancouver for Apr / May shipment with last trade reported at USD 448 PMT. New crop offers edged higher to USD 365-70 for Aug/Sep shipment with bids around 350-5 levels.
7)Green peas prices also surged with selling ideas shown around $ 590-600 pmt DAF Vancouver for Apr/May with some trades reported at 580 levels. Consequently, New crop prices increased to USD 500 for Aug/Sep shipment with bids around 475 – 480 levels.
8)Canadian YP no. 2 in bulk in containers offered between USD 525 – 530 CNF India and buying interest is close to USD 500 levels for Apr-June. Offers for China quoted at USD 495-500 CNF Qingdao with practically no buying interest.
9)Canadian GP no.2 (3% bleach and 3% splits) in bulk in containers also surged and offered around USD 630-40 CNF Qingdao with no nearby buying interest. However, Trades were reported at USD 670-5 PMT for current crop (May/June) and at USD 585 – 590 PMT for new crop (Sep/Oct) basis CNF Indian subcontinent ports with multiple ports options.
10)Canadian Maple peas, currently no offers however New Crop offers at USD 715 – 720 CNF China for Sep/Oct with bids around 685-90 levels. Last trade reported at 700 CNF.
USA
1)USDA project Peas acerage in 2024 at 974,000 acres (similar to 2023). However, Green Peas areas to expand at the expense of Yellow Peas.
2)The estimated 2024 Peas production at 760,000 mts (820,000 mts in 2023). Yellow Peas at 485,000 mts (608,000 mts in 2023) and Green peas crop at 275,000 mts (more than 2023).
3)With lesser production and expected drop in imports of Chinese Pea Protein amid anti dumping row may allow USA to look at Canadian peas for imports.
BLACK SEA (RUSSIA & UKRAINE)
1)Russian currency (Ruble) somewhat weakened to 92.5 vs USD.
2)Ukraine : As on 4th April, Ukraine Govt informed that 119,000 hec is planted with Peas (mainly Yellow) out of a proposed 160,000 hec for 2024 crop. With an avg yield of 2.5 mts / hec, we expect a crop of 400,000 mts (90% of it will be Yellow Peas). Peas crop is virtually over and new crop will be harvested earliest in July, weather permitting.
3)Russia : Peas plantings for 2024 crop just begun and due to complete by early May. Russia does not produce official data on plantings of Peas, however, trade expect about 1.8 mln hec with a possible crop of 4.2 mln mts (5% more than 2023). Weather has to be good with sufficient rains in May / June to achieve an avg yield of 2.5 mts / hec.
4)Russia has a carry of about 200-250,000 mts Peas from current crop with majority of peas concentrated in far flung areas of Central Russia and Siberian regions. The movement to port areas are cumbersome and time consuming because the main source of transportation is Railway. Rouble exchange rate based export duty of 7% and higher local transport cost from far areas makes it commercially unattractive for exports at current levels.
5)Five EU countries namely Lithuania, Latvia, Estonia, Poland and the Czech Republic appealed to the European Commission to ban the import of grain from Russia and Belarus to the European Union as reported by LRT. During 2023, the EU imported 1.53 mln tonnes of Russian grain worth 437.5 mln EUR.
6)The EU Commission is mooting an idea to slap a duty of EUR 95 / mt on grains from Russia and Belarus to make them uncompetitive in EU markets. EU (mainly Spain and Italy) covers their annual feed peas requirements of 700,000 mts from Black Sea, Eastern EU and Baltics region and Russian peas accounts for about 80% of these imports.
7)Local (CPT) Russian peas prices keep on increasing on reduced supplies and YP are being indicated in containers around USD 455-60 CNF Nhava Sheva / Karachi / Jebel Ali and USD 485-490 Kolkata / Chennai respectively.
8)Russian Yellow Peas in containers are shown at USD 415 – 420 CNF Qingdao, China for Apr / May with no buying interest.
CHINA
1)Muted domestic demand coupled with weaker currency (RMB) at 7.25 vs USD causing import disparity.
2)Chinese ports said to carry stocks of 450,000 mts. Yellow Peas stocks are like 445,000 mts and Green Peas about 5K.
3)Domestic peas prices in China (esp YP) improved by Rmb 50-100 / mt on India extension news. Prices are expected to rise on reducing stocks and low carry at origins.
4)Chinese local prices are as follows:
(Yellow P) clean cargos (Canada) at 3500 Rmb (parity about USD 391)
(Yellow P) clean cargos (Russia) at 3300 Rmb (parity about USD 367)
(Green P) clean cargos (Canada) at 5000 Rmb (parity about USD 572)
Note: No stocks of high bleach Green Peas and Maple peas & hence no prices.
5)Chinese Peas imports dropped considerably in Jan and Feb compared to previous 3 months of unprecedented volumes. Imports in February were 127,000 mts with 83,000 mts from Canada and 36,000 mts from Russia were major exporters.
6)A sizeable quantity of imported peas are consumed by feed industry. Soft prices of Feed products like soymeal and corn are also contributing to drop in peas demand.
7)Chinese fractionation industry (Pea Protein) is also under investigation by US authorities for anti dumping which support the theory of lesser Chinese peas imports but China exports pea protein to 60+ countries and USA share would be close to only 10%.
8)As informed by some market sources, some traders in China are trying to re-export Yellow Peas to India however its not feasible due to strict Chinese customs policy of re-exports.
INDIA
1)GOI (Govt of India) on 5th Apr 2024, for the second time extended “Zero Tariff” imports of Yellow Peas with H.S.Code 0713.10.10 for all shipments with Bill of Lading (On Board date) to be issued on or before 30th June 2024. Import is “FREE” without the “MIP” (Min Import Price) and without any restriction on quantity or port.
2)The import restriction continues on Green Peas (eg from Canada, Argentina) and other types of Peas like Dun / Kaspa (from Australia). There is a strong rumour in the market that Green Peas will soon be allowed to import without any duty or condition.
3)Approximately, 1.2 mln mts Yellow Peas have already arrived India by 31st Mar 2024 in bulk vessels and containers. Russia with over 605,000 mts closely followed by Canada about 550,000 mts were the major exporters (origins). Some cargo on water and Trade expects additional 300,000 – 400,000 mts Y peas will be shipped for India by June end. It is to be noted that historically India imported highest volume of 3.17 mln mts peas during the worst affected season of 2016/17.
4)Majority 65-70% of peas have arrived West coast ports of Hazira, Mundra, JNPT and Kandla port.
5)Govt has been successful in checking food inflation and maintain “Pulses” prices under control by opening imports after a gap of 6 years.
6)Local prices of Yellow Peas and Green Peas are recorded at INR 40 / kg (equi of usd 450 CNF) and INR 75 / kg (equi of usd 870 CNF) respectively.
7)India may harvest total Peas crop of about 1 mln mts which is under harvesting at the moment.
8)Indian Govt has ordered states to mandatorily disclose stocks of pulses once a week from 15th April. The order will apply to stocks of pulses with CWC (Central Warehousing Corporation), dealers, stockists, importers and customs warehouses.
9)As per Govt of India, Second Advance Estimates of Rabi crop 2023-24 : Desi Chick Peas production at 12.161 mln (13.63 mln last year) and Lentils (Masur) prod at 1.636 mln (1.559 mln last year).
10)Harvest of Rabi crop 2023-2024 Pulses (mainly Gram, Lentils and Field Pea) gathers pace but unable to create harvest pressure due to slower arrivals in Mandis (local markets). This suggests that either crops are short or farmers are holding on to their produce. Market believe that Chana (Desi Chick Peas) crop is short by 25-30%, Matar (Peas) crop is reduced by 15% and Masur (Lentils) crop lower by 15 – 20% respectively from the official crop estimates.
11)Domestic prices of Chana (Desi Chick Peas) almost stable and noted at INR 59 (equi of usd 680 pmt) for MP / Rajasthan variety and INR 57 (equi of usd 655 pmt) for Imported Tanzania desi chick peas respectively. Peas prices are positively co-related to Chana prices / trend in India.
12)Govt has started procurement of Rabi crops and so far procured about 15,000 mts Chana and their target is to procure 1.3 – 1.6 mln mts in 2024/25 for buffer stocks. Barring few centres, Govt agencies are expected to initiate procurement of these crops from farmers between 10-15th April at MSP (Minimum Support Price). It is to be noted that MSP of Chana is INR 54.40 / kg (equivalent. of USD 620 pmt) and Lentils (Reds) is INR 64.25 / kg (equivalent of USD 740 pmt). There is no MSP for peas.
13)Trade expect that Govt may reduce import duty on Chana or Kabuli chick peas in near future to pave the way for imports of Desi Chick Peas from Australia. Australia is the only major source for imports of Desi Chick Peas with sizeable quantities and Australian desi chick peas attracts 66% import duty in India. Govt controls desi prices by procuring / selling from / to their buffer stocks.
14)SKYMET (Pvt weather forecast agency) on 9th April forecast ’NORMAL’ monsoon – 102% (with an error margin of +/- 5%) from June – Sep 2024. The commencement of monsoon may be erratic and delayed due to expected transition from “El Niño” to “La Niña”. Heavy rains during Sep may coincide with harvesting of some pulses like Black Mapte and Green Mung and can impact yields qualitatively and quantitively.
TAKE AWAYS
1)Production of Yellow Peas (YP) globally may be marginally higher against earlier expectations of bumper crops at most origins. Weather will hold the key.
2)India has the potential to import 2 – 2.5 mln mts YP during the calendar year of 2024 and may be back in market in SH of 2024 owing to smaller than estimated crops of Yellow Peas, Chana (Desi Chick Peas) and other Pulses.
3)Current crop carry of YP is limited and Supplies can only increase from July onwards with new crop harvests in major exporting countries of Ukraine, Russia, Canada, EU and Baltics.
4)Imports of YP in India post April are anticipated to be in smaller quantities on account of reduced availability and disparity with most origins.
5)Bangladesh, Pakistan and Middle East buyers are expected to be back in market after EID holidays to cover their requirements thusby increasing the competition.
6)Downside in YP is restricted and more chances of upside in short / mid term.
7)China may remain silent until new crop (for next few months) on back of sizeable stocks (of peas) and weak demand.
8)India announced Federal elections during April/ May and results early June, hence, it is unlikely to expect any major change in pulses import and export policy.
9)Will India open Green Peas imports ?
10)How the import arrivals of YP is going to impact prices of Yellow Peas and Desi Chick Peas in India and eventually affect price direction in next few months.
