Pigeon peas are a deficit crop balance calendar 2023. India would normally be expected to produce about 4.25 MMT and import about 0.75 MMT a year from Myanmar and East Africa. India pigeon crop size was forecast by government at 3.6 MMT but trade perceives and price is behaving as if its lower. This past week, Tamil Nadu allowed its 20,000t tur dal tender to include split dehulled green lentils. This can incrementally help feed discretionary green lentil demand, but north half of India can engage in substitution with a modestly cheaper red lentil, and in doing so free up more supply for those that must have higher priced pigeon peas in their diet. Substitution demand is a boring calendar year grind. Patience is required because secondary demand is different than primary demand.
We must also chew through remaining market ready supply from Australia (ABARE estimated it at a monstrous 1.4 MMT) and from summer Canada/Kazakhstan harvests, made easier if price of competing crops soften. Remember that importer affordability issues remain. The world has to grow into Canada’s price, yet pigeon pea is all you need to know why directional risk for red lentils ought to be grindy-higher into later 2023. Averaging various India domestic points would suggest red lentils being about Rupee 1500 per 100 kg cheaper than pigeon pea, or about US $185/t. This a big deal. This and many other trend price expectations have been researched. Please flip me an email or call.