PULSE MARKET UPDATE NOVEMBER 2018
Roger Vickers, Chief Executive of PGRO, comments it is a market that has been described as ‘quite interesting’- potentially the understatement of this very unusual season.
The good news is that, despite uncertain volumes and high prices, the market for feed likes pulses and is keen to source non-soya protein.
Internationally, the market for vegetable protein is growing and pulses are key to supplying that demand. Whether peas or beans they are being snapped up - and a preference for local production and consumption also appears to be gaining traction - especially in Europe.
The trade shenanigans taking place between the USA and the Chinese seem to be having an effect, and the Chinese appear to be busy buying up Canadian peas - making up for the loss in Canadian exports to India as their effective embargo continues.
The Baltic bean crop was sold forward in significant volumes. Short positions in that market are thought in part to be holding up some bean values on international markets.
Australian faba bean harvests are expected to start in mid November, but latest suggestions are that their yields will be down and availability will decrease by 10-30% depending upon sources.
The Australian crop is already trading at a premium to UK crop of up to US$ 200/t.
UK Pulse markets
Franek Smith, President of BEPA, reports that UK seed availability for the 2019 bean crop is a significant topic of conversation. Winter beans received a derogation for quality, and the same is likely to be requested for spring sown stocks - which appear to be slightly but not significantly better.
The demand for winter beans has been high. An open autumn period and good seedbed conditions has tempted some to sow spring beans in the winter. Others are looking closely at failing oilseed rape crops with a view to replacement with pulses in the spring. Blackgrass control and the need for a break crop remain significant drivers too.
The total crop area for 2019 remains uncertain but may decline on the back of seed availability, something that is also believed to be an issue for Baltic producers.
The UK feed bean crop is most certainly significantly down as previously reported, and whilst forward exports continue to be despatched for feed, this is likely to be short-lived.
Feed beans at one brief point were traded at 220/t ex-farm, but appear to have hit a ceiling and are now more likely to be offered around £215-220/t ex-farm for movement before Christmas. That said, although the prices are holding, imported yellow peas are now potentially an attractive proposition for compounders aided by recent historically high bean prices, a stronger sterling, and uncertainty of unsecured bean volume. Imported peas can be landed port side for around £205/t.
Alternative sources of protein are always able to put a top on pulse prices, but with the closure of the Vivergo and Ensus bioethanol plants, DDG may soon be of local historic interest.
The feed bean market for 2019 crop has already opened with some merchants and it is possible to receive offers of circa £20/t ex-farm over November wheat futures.
For human Consumption Beans, despite the acceptance of importers that a reduction in quality specs is essential, it is thought unlikely that the UK will export as much as 100,000t from crop 2018 to this market. Allowances for up to 20% Bruchid damage have been accepted.
Whilst vessels have sailed, the main activity has been in containerised shipments, and more recently in bagged produce to Sudan.
Value for exceptional quality samples with less than 5% bruchid damage have hit as high £300/t ex-farm. More normally a premium of around £50/t ex-farm over feed values is realised, with a range generally £250-300/t ex-farm depending upon quality and location.
Chick peas are now thought to be taking the place of Faba bean in some Egyptian markets where splitting is required.
In comparison to the bean market, the market for combining peas is far less interesting at present.
Demand for marrowfat peas remains good and there appear to be few open market parcels available. Prices off contract appear similar to blue peas with a slight premium to £285/t ex farm. Colour retention, visual appearance and cooking qualities are as ever important.
New crop contracts are available for crop 2019 with values at around £350/t ex-farm before any deductions for quality issues - and with bonus options, that could bring as much as £380/t. These levels are starting to attract increased interest in crop 2019.
Typically, deductions start at 10% bleaching with around £3/t for every 1% bleached over 10% to a maximum of 30% bleaching. At 30% and beyond the prices are generally out of contract.
The market for large blue peas has been trickled up a little in recent weeks and represents values of around £280/t ex farm for movement pre-Christmas. It appears that some growers off contract are holding out for £300/t ex-farm but the threat of imports from the USA / Canada could put on cap in this aspiration at around the current level.
New crop 2019 contracts have been revised upwards slightly and remain available based on quality criteria being met and a min/max value of £225-£275/t ex-farm.
Yellow peas remain of little domestic interest at this time. There appears to be no market.
Maple peas appear to be very short with very few offers. Are there any on farm unsold?
Tic Beans are also in short supply and prices have risen to around £280/t for this small and very specialist market.