Pulse Market Update from BEPA and PGRO for July 2015, issued on 31 July

“The new crop of peas are upon us in some cases. The earliest crops will already have been safely gathered in cooler, kind conditions before the recent rain, ” says Chris Collings, President of BEPA (British Edible Pulse Association).

“In the UK it has generally been a comfortable growing season for producers of peas and beans. A slow cool start gave cause for concern, but the crops seem to have got themselves set. Then when the temperatures rose, a regular supply of moisture allowed the crops to thrive. For both crops, disease intensity has generally been low, and apart from a massive late spike in black bean aphid pressure (and a temporary exhausting of national availability of pirimicarb products), so have pest levels. The trade remains optimistic for a good quality harvest with satisfying yields.”

Looking at international markets, he notes that French bean crops suffered in the flowering period from drought and high temperatures which exceeded 40C for several days at the end of June. The north western areas have fared better than the Paris basin region and further east. It is expected that the French bean crop may yield similar volumes from an increased crop area, but quality will again be poorer than desired. Bruchid beetle remains a continuing and dominant problem for French producers and will restrict their ability to access the North African export markets. Pea crops have similarly been affected, with the high temperatures limiting yield potential as pod set and flowering stopped early.

In Canada, the latest crop update details the increase in sown area of pulses and special crops over the last three years. Whilst 2013-2016 harvest year figures show an increase in actual and forecast crop area, the estimated yield per ha is decreasing and the total yield is predicted to fall consistently. Total production is set to fall from 6.8 million tonnes to 6.1 million tonnes in 2016. Persisting dry conditions are the headline reason suggested for this trend. Canadian green pea quality was variable in 2013/14, and as a result premium over yellow peas were lower than historically achieved. 2015/16 production of green peas is expected to fall. Low but increasing levels of interest in Faba bean production continue, especially in the state of Alberta. Canadian Faba beans are being offered to North African buyers.

In the USA, with reported expansion in Montana, the US crop area of peas is set to increase by around 7% next year, rising to a record 400,000ha. Production is expected to top 0.8 million tonnes.

Australian Faba bean production area rose 39% year on year with 228,200ha sown for crop 2015, the larger cropping areas being in New South Wales, South Australia and Victoria. Earlier in the year with some frantic talk of a strongly developing El Niño effect likely to impact Australia, there must have been some worried growers in the southern states. The crucial period for 2015 harvest is not over and many areas will need significant moisture during the flowering and pod fill period. Nine of the ten driest winter–spring periods on record for eastern Australia occurred during El Niño years. Although most major Australian droughts have been associated with El Niño, drought does not occur with every event, and the strength of an El Niño is not directly proportional to drought intensity. The official current outlook is for warmer temperatures and drier conditions in the south and east-the major Faba bean cropping areas.

In Egypt, issues relating to accessing hard currency have limited some trades in recent months and are not resolved, although reports indicate that the Egyptian economy is growing and is expected to be boosted in the coming months by large infrastructure projects. Egyptian population is 8 million larger than in 2010 at 86.7million. Demand will remain high, but it will be the availability of hard currency controlled by the government and competition amongst suppliers that will dictate the pace of trade in the new crop. The weakening value of Sterling will help exporters.

Chris Collings notes that, in the UK market, the overall picture for feed beans has not changed dramatically since the May market update: “There is continued pressure on the markets with the prospects of good supply forcing all prices down. Since May, the price for feed beans has fallen to below £160/t but in reality there has been little trade in the intervening period. Earlier commitments for November shipment agreed at £160/t look good as values have followed wheat down and now trade at circa £20 over November feed wheat futures.

“There is still some time to go until harvest and growers need to focus on maintaining what has generally been a good crop so far, with the market principally being driven by wheat values. There is confidence of supply in the market and UK feed compounders are now interested for ruminant rations.”

“For human consumption beans, as noted above, there is some uncertainty about the level of crop available from France and Australia and the quality of the produce that will be offered, hence UK produce will be in demand.

“Estimates of forward premiums for human consumption beans remain at £20 to £25/tonne over feed bean values but without trades. This puts current values at around £165/tonne ex farm.”

“It is anticipated that Baltic, Ukrainian & Polish production will be offered in bigger volumes this year as their 2014 crop was accepted by Egyptian markets. These are trading at a discount to the UK crop circa of around -£15/tonne. Canada produce is being sold at a premium since it is very close to the original Egyptian beans and appreciated by customers for size, quality and taste.

“The emphasis as we approach harvest has to be upon achieving the best quality, maximising yield, and taking the beans when they are ready. Fitting them in around other crops is a great gamble that can see premiums, markets and margins disappear in a flash. With larger crop areas in the ground and potentially more crop to harvest the emphasis on quality is a must for growers.”

For combining peas, the marrowfat story continues. Restricted for 2015 by seed availability, the situation is unlikely to alter dramatically from 2015 crop. With higher returns anticipated for good quality produce, over £300/tonne might be expected - but retaining a good visual sample is essential and cropping priorities need to be orientated towards achieving this. The trade anticipates a small carry over into the next harvest year ensuring the all-important continuity of supply in the supply chain for clients, that has for too long been missing.

As previously reported, some parts of the trade have received very significant interest in 2016 crop and in some cases have already closed their contract book. With area set to rise a little, growers are advised to check out contracts to secure the market for their produce. Marrowfat pea production carries some risk and requires high quality produce to command best values and returns: peas which fail to make the grade are likely to trade at a significant discount- below the value of feed beans. For blue peas, at the time of writing there is no news of new crop trades but old crop values have fallen to below £175/tonne ex with poor samples at less than £145/tonne.