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PULSE MARKET UPDATE - SEPTEMBER/OCTOBER 2019

AVERAGE BEAN YIELDS ARE ESTIMATED AS ALMOST 5T/HA, WITH COMBINING PEA YIELDS ALSO GOOD WITH EXCELLENT CONTRACT VALUES

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

It appears that the UK bean crop may have been around 650,000 tonnes from crop 2019. With the DEFRA June survey in England suggesting that the bean crop area fell 11.4% to just under 134,000 ha, this would make the average yields almost 5t/ha, that is around 2t/ha up on the very hot and dry crop of 2018. The same survey suggests that the pea area increased by 7.3% to just over 40,000ha and yields here have also been good with excellent contract values.

Overseas ...

Baltic - there is little news of the Baltic competition in the market. Only a few samples have been seen and these are not great. It is believed that the region has fared less well than the UK in bean production 2019.

France has had a number of poor seasons with bean production and now struggles to reach the visual quality standards for Egyptian exports instead now focussing on developing the export market for fish feed. Crop 2018 was no different. Pea production is focussed on Yellows and the importance of the pea protein extraction market is growing. Lentil and Chickpea production is also rising in France.

Australian crop forecasts remain unchanged - they could be up 20-30% on last year.

International pea availability is set to increase with the forecast from Canada that their production will increase 20% from the 2019/2020 crop and the US area increasing 18% to over 1 million acres. Assuming normal yields, this will bring the availability from North America to over 5 million tonnes.

EU buyers are quoting BREXIT as an excuse not to buy peas. But since WTO tariffs on peas are zero, this is hard to understand. Imports of peas into the UK feed market have now dried up with values higher than domestic feed beans and alternative protein sources. Imported peas are circa £200/t ex port.

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

Feed Beans
The value of feed beans fell immediately after harvest but has been pulled up again from a low point, buoyed by significant bookings for export and covering short sellers in the domestic market. It is believed that over 50,000t have been booked for early shipment to Mediterranean and near EU destinations, largely for monogastric feed purposes. In parts of Italy and Spain there is a traditional ham production market that especially values beans.
 

Extruders for the UK chicken feed market have been buying, but current prices are still perceived to be too high for domestic producers using least cost formulations of compound feed. So whilst they have smaller specific uses which cannot be substituted, they are not featuring beans in larger scale plans at present. Values would have to fall a further £10-15/t to change levels of interest.

Fish feed manufacturers are also finding prices at the top side and are operating at the minimum inclusion levels at present.

Current values are around £170-£178 ex farm

Human Consumption beans
There remains little current interest from buyers of UK exports. Buyers are viewing samples from the various alternative markets and have yet to make their move in earnest. There has been significant disturbance in the market following a number of financial issues with buyers in the destination markets following high price commitments and volatility in availability from crop 2018.

UK samples from the southern regions have not improved. Winter beans are by and large suffering from poor visual appearance including staining. Spring samples are much preferred and must have <12% Bruchid damage to stand a chance of retaining interest. Samples from north of the Wash area are proving much more attractive.

Premiums for perfect samples are good with prices reaching up to £225 t/ex. More normally the range might be £210-220/t ex farm.

Combining Peas
There were some early post-harvest views that the market might be almost too flush with high quality peas.Now that more samples have been seen, there is the realisation that whilst early harvested crops were near perfect, those taken after the rain in August began have suffered significantly.

The crop has produced a mixed bag. The later crops are producing higher than normal quantities of waste and admixture with 20% not unusual in comparison to an average year of 8-12%. It is believed that this has occurred as peas partially rehydrated in their pods, splitting skins and shattering in combining and handling.

Marrowfat peas
Yields have been good and issues with soaking and cooking are significantly less than the 2018 crop. Issues with off types in some crops are causing concerns and potential deductions in cleaning.

Prices remain based upon established contracts and it is very hard to know where a buyer of free market marrowfats will be found in the short term.

New contracts are available for crop 2020 with a number of buyers. There are variations for quality bonuses and deductions but most have a base price of £300/t ex farm with the opportunity to reach £330/t for top quality produce.  With the current lack of interest in free market marrowfat peas it might be considered wise for growers to get a production contract before sowing crop 2020.

Blue Peas
Cooking qualities are exceptional in comparison to crop 2018, with very few issues with non-soakers and excessive dryness. With a wide range in quality being offered, prices for open market blues have a similar wide spread. £230-£275 separates the best from the rest.

Crop contracts for 2020 harvest are available currently around £275/t delivered.

Yellow Peas
Interest remains limited but buyers are there for visually appealing produce. There is a premium over feed and £210 /t ex would be a reasonable expectation.

Maple peas
There appear to be few available. Any open market parcels have good values and could fetch £300/t or more ex farm.  The variety Rose has a niche export demand for the food markets and Mantara is preferred by the pigeon trade.

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The next Pulse Market Update will be October/November 2019