Roger Vickers, Chief Executive of PGRO, comments that a quiet few weeks in the trade suggests bean values may have peaked. After many weeks of seemingly inexorable rises it seems that bean values may have now gone over the top.
The second quarter of the year is likely to mostly focus on the prospects for the new harvest and distribution of the remnants of the already traded produce from 2018.
With increased contract values in the UK pea market, initiatives in the trade to reward growers for higher protein values in beans, and difficulties with oilseed rape establishment, a previously pessimistic trade had begun to consider a potentially slightly more optimistic position. However, in recent weeks there has been renewed uncertainty about the spring sown crop area in the UK and most are reverting to their earlier, more conservative estimates of a reduction of up to 15% in spring sown bean area. Peas are potentially static at best.
If there is a positive highlight it may be that winter-sown beans have increased by up to 5%. These figures remain best estimates as no official figures yet exist and indeed drilling still continues, especially further north.
When it comes to availability for trading, much will depend upon the outturn. Even a return to average yields could easily compensate for a crop area decline of 15%. Sowing of spring pulse crops is generally well ahead of the calendar last year and is believed to be about 90% complete in the southern half of the UK. Most has gone into extremely favourable soil conditions, giving an excellent start.
Looking internationally, Canadian production probably has the most influence on the world pea prices. With their interests in the Indian market still dampened by the high import tariffs and imposed import limits, their largest markets remain China, Bangladesh and the USA. Firm export demand - in part stimulated by lower CAD$ values vs. US$ - is expected to increase average prices. Then as stocks reduce, prices for the 2019/2020 crops are forecast to remain unchanged.
India has extended its import restrictions on peas, imposing a 150,000t limit between April 2019 and March 2020. Putting this in context, Canada exported over 1.9million tonnes to India in 2016.
UK Pulse markets ...
Lewis Cottey, President of Pulse UK, reports that the market remains very quiet, and with most of the old crop already traded, beans are now rather hard to sell. After falling £8-10/t in the last month, typically they are now valued around £245-250/t ex depending upon location.
Shippers are largely covered for their commitments, and with beans difficult to locate, the risk vs. reward potential for further commitment to vessels for old crop at high values is now perceived as too great.
Early pricing of new crop beans is around £190- 195/t ex farm. Forward trading is very quiet with only seven or eight export cargos secured so far. It appears that the UK trade is currently the only active export seller.
As China continues to vigorously address issues it has with African swine fever, the perception is for potentially falling soya values with reduced demand, making faba beans at their current prices look dear in comparison for autumn use. There is currently little domestic market enthusiasm for buying or forward selling.
Human Consumption beans
With little UK availability, the old crop trade has tailed off to a trickle. Top quality product can still command up to £350/t but, more typically, around £275/t ex might be realised for product that requires tidying from up to 30% bruchid damage. Demand remains good but good quality Australian crop is now being supplied.
With the experience of high levels of bruchid damage in 2018, and buyers working lower quality into the market, there are question marks as to whether the same levels of premium for good quality will be maintained in 2019.
There is little forward buying or selling in this market either. Early offers exist for £220-230/t ex for good quality (<5% Bruchid damage) suggesting a premium of £30-40/t over feed values.
Some offers from Baltic suppliers have been made, but the sowings in that region are behind the UK and crop area is still an unknown.
This is a similar story to the bean market with most of the old crop now traded. Domestic microniser requirements appear to be covered and values have risen too high for exporters.
With few farm sellers it is suggested that those with any remaining good quality peas may be holding them to sell against improved 2019 harvest contracts.
Contracts for large blues, marrowfats, yellows and maple peas remain available in the trade for those with remaining interest.
Values have fallen slightly as we are now nearer to the new crop. Typical values around £300- £315/t ex.
Large blue peas
Values are as high as £270- £325/t ex quality dependant. With supplies generally few and far between, some larger parcels believed to be surplus seed have been traded recently.
Some recent domestic interest has emerged from buyers and sellers with suggested values of around £230/t ex.
Maple peas and Tic beans
These represent a very niche market alternative - but all in short supply.
For the pigeon trade, Mantara is the preferred PGRO Recommended List variety due to its colour and smoother regular surface. The variety Rose has its primary market in exports for confectionary peas.
Maple peas are currently valued at around £350/t ex.
Tic beans have a premium over feeds beans of perhaps £30/t, perhaps £275-280/t ex.
The next Pulse Market Update will be May 2019