It is historically an unusual time of year to publish a Pulse Market Update. But these are not usual times.
While freight issues remain, the post-covid chaos in shipping seems to be easing a little, bulk vessel tonnage is now more expensive than containerised shipments and shipping prices, in general, continue to rise. Domestic demand, in general, is improving, with the messages about reliance upon imports and carbon footprints apparently starting to hit home.
The trade of crop 2021 has, by and large, been over for quite some weeks and since mid-spring, there has been little off-farm trading to speak of. This, of course, does not mean that the trade has sold all of that which has been bought and some still remains to be collected or lies in stores awaiting shipment. In the meantime, the values for pulses have been all over the place with feed beans having peaked earlier at something over £340/t ex farm and marrowfat peas completely smashing the £500/t barrier. With beans swinging upwards and maintaining a premium in response to rapidly rising wheat prices, peas have followed suit but also in the case of marrow fat types in response to a significant under-supply.
In recent weeks the peak has come off wheat prices in the approach to harvest and bean prices have also fallen. Whether these lower current market values are to be the new normal or whether political events, heat wave effects or harvest news in Europe will cause a return to higher levels is complete guess work. Eyes, therefore, are now on the new crop and the development of buyer interest with prices quoted likely to be out of date the moment they are mentioned, such is the wildly fluctuating situation.
There is little farm forward trading with most growers preferring to wait and see what harvest will bring and most buyers are reluctant to stake money on a trade before having secured a market, and end-user interest at this time is largely covered by earlier commitments. It seems almost everyone is playing a game of ‘wait and see’. Few are taking positional risks.
It is known that the area of peas and beans in the Baltic States has risen to former levels following a dip in 2021, but a harvest forecast has not yet emerged. In the southern hemisphere the Australian crop is also under some discussion following the news of significant flooding in various regions. This crop is of course much further away from harvest and a forecast is also unlikely to be reliable at this stage.
UK Pulses
Feed beans
The value of old crop feed beans has fallen from a peak and is now up against alternative sources of cheaper protein – mainly soya and rape seed meal. To compete with least-cost buyers it looks as though the current bean values (possibly around £280/t ex farm) are a little high, but the situation is unstable. A premium of around £30-35/t might be available over November wheat futures for autumn movement.
At the time of writing there is currently almost no forward trade ahead of harvest.
Bean Exports
There is optimism that the 2022 crop will be of good quality and there is hope that there will be a good opportunity in the human consumption export market. However, this is far from certain as much will depend upon the ability to compete on price and quality with produce from the Baltic states and later availability from Australia. There has been little forward buying.
Importantly and perhaps more immediately significant is the state of the Egyptian economy, which seems near financial collapse making trading positions uncertain to say the least. It is a market which at times seems to operate with little stock control, buying only being triggered when local availability falls completely, driving immediate requirement. Currently, there are no buyers and a good offer might reach £295/t ex farm for immediate sale. Questions are being asked about the long-term requirements in this market – while the population is growing it is also changing and some are questioning whether the desire for traditional foods may change over time.
UK Combining Peas
Feed pea values are as usual at a discount (perhaps £20/ t ex farm) to feed beans.
So close to harvest there remains little trading activity.
Contracting for crop 2023 has been active for several weeks. However, with prices so volatile there is some reluctance from both grower and the buyer to commit to a fixed price and options are getting creative.
Green peas
Contract opportunities remain available for crop 2023 with some on a very flexible basis. There is commitment to grow and to buy but with options for the grower to fix the price and time of movement at their choice based upon meeting quality criteria and formula for price establishment. This is in recognition of the volatility that has surrounded the market in recent months. Others are offering more fixed contracts up to £430/t for top grade peas from 2023 crop.
Marrowfat peas
Very short from harvest 2021, they have recovered significant area in 2022 but, depending upon harvest, yield and quality are again likely to fall short of demand, raising the prospect of the increased values referred to remaining.
Contracts for 2023 are available with various values and quality criteria stipulations but with the very realistic opportunity to receive £570/t ex farm.
Yellow peas
With increasing demand for derivatives from pea, the yellow pea sector possibly presents the largest growth potential for peas. They remain heavily influenced by global productions in Russia, Ukraine, France and Canada. With few issues around colour criteria and with good yield potential they offer some significant attractions. Current open market values would be around £350-£375/t ex farm.
UK production has typically been low but there is some demand and contracts are available.
Maple Peas
Carry-over stocks appear to exist for the variety Mantara. Enquire with your merchant if you are interested in contract production. Its main market is racing and domesticated pigeon feed and there are few takers in alternative outlets.
Variety Rose is demanded by export consumers as it offers higher premiums for human consumption qualities. Typical values for current contracts are around £330/t. Limited contracts are available for crop 2023 – contact your merchant for offers.