Roger Vickers, Chief Executive of PGRO, comments on UK and overseas pulses ...
The news from the fields is good. Most growers are reporting much higher yielding crops than in 2018 and significantly better quality with little drying required. However, it is early days - whilst 80% of the peas have now been harvested, perhaps 70% of the beans remain. Nonetheless, yield indications are very good.
With much of the bean crops still to be harvested, and yields of other combinable crops being good too, many farmers faced with a storage issues may opt to delay their bean harvest. This could impact on quality, if crops ‘suspended’ in the field for want of storage space are allowed to stain.
An abundance of good quality produce presents issues for traders, making premium markets harder to find. Buyers of UK exports realising this situation are taking time to come forwards - and some in Europe have still to return from summer breaks.
Most of the short sellers are now believed to have covered themselves, and as a result, the high prices of the latter end of the 2018 crop trading season have begun to fall back. However, with wheat prices at below £130/t ex farm, the value of pulse crops (especially beans) still remains extremely promising for those looking to sell. Those who harvested good quality peas on contracts look to be in a pretty good position.
Baltic bean crop news is thin on the ground. Crops are thought to be down on 2018 but of better quality. Currently few offers are available.
Australian bean crops appeared to be more assured than they were a few weeks ago, and it is anticipated that their volume to market could be up 20-30% on last year.
French pea harvest has been good with good yields although, as these are mostly yellow peas, these do not compete in quite the same market. French bean yields have been described as a disaster in parts, suffering terribly with the very high summer temperatures in June and July.
Lewis Cottey, President of Pulses, UK reports on UK Pulse markets …
The yields of winter beans appear to be good, but quality is variable with many samples stained or smudged. Much of this will head directly to the feed market.
Bruchid damage in the earlier harvested beans appears to range from zero to up to 40% with the worst quality in the southern and eastern regions. Significantly, there are many samples where the bruchids have yet to emerge. Holes absent, the beetles remain inside the bean until full maturity is reached.
Samples arriving at merchants from The Wash northwards are just arriving and quality appears to be significantly better than both further south and on last year.
There is currently little domestic demand for beans. Prices are considered too high - especially in comparison to rape meal - and with farm forage yields and quality having been very good this year, the total market for bought feed is likely to be down.
However, feed buyers for shipment to the Mediterranean region are active and apparently unflustered by current values or politics. It is believed that most of this heads into the poultry sector where faba beans are a preferred, valued ingredient - this has been described as an ‘inelastic demand’.
As the previous shorts that held up the market prior to harvest have been covered, the value of commodities such as wheat have fallen significantly and the availability of beans has increased. Hence, inevitably, the market price has fallen. Values of over £200/t ex farm have long gone and pressure is bearing down on the possibilities of achieving £185/t ex farm. Whilst the market is still fluid, this still puts bean values at a significantly higher than normal premium over wheat, and to many may represent the most valuable crop on the farm this year.
Human Consumption beans
There is little current interest from buyers of UK exports. They are sitting on the fence waiting to see what happens in the certain knowledge that quality is better than 2018 and volumes better too. In this situation relatively small sales can significantly impact values.
Sudan is starting to enquire for the window before February for container shipment.
Historically, up to £30/t has been the normal premium over feed. Last year this was significantly exceeded. This year a settled level has yet to be established.
The quality of peas from crop 2019 is generally very good. Colour retention has been excellent with waste typically around 10-12%.
With much of the supply produced on contracts it is difficult to see those with free market production finding takers in a hurry. Those with good quality peas may be advised to put them into store and wait. Those with poor quality peas will be faced with a price at a discount to feed beans - currently a typical deduction of £5/t ex farm.
It is likely that those with contracts will do very well from 2019 crop. Perhaps in part making up for the poorer returns of 2018. These things are cyclical emphasising the wisdom of valuing the crops over a full rotation.
These are significantly better yielding than 2018 with many crops reporting over 3.5t/Ha from samples across a wide production area. Colour is very good with acceptable waste percentages.
Prices will be 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.
A similar story to marrowfat peas, with good yield and colour. Some issues with splitting are emerging - often caused by peas harvested or handled too aggressively when over dry.
Values for open market crops are currently around £270/t ex farm, and whilst the market for bleached samples is yet to emerge, it is likely to be a discount of at least £25/t ex farm. Those with open market crops and a willing buyer may consider these prices worth taking. Increased yields may help compensate for falling values.
A limited UK market, but one that longer term and internationally looks set to expand in the light of significant developments with pea protein use in meat substitution.
Currently the UK market is limited, and whilst few samples have been seen, quality appears to be good. Suggestions of free market samples at around £210/t to £220/t ex farm.
An even more niche market in extremely short supply from crop 2018. The value of contracts for these was up to £340/t and yields have been good.
The variety Rose has a limited demand in specialist niche exports.
Other varieties head for the pigeon feed market and regional niche dish products – especially in the North West of the UK where they are known as Carlin peas.
The next Pulse Market Update will be September/October 2019