May 04-24: India Extends Tariff Free Pea Imports

India extending tariff free yellow pea imports by four months to Oct 31-24 and dropping chana (desi chickpea) duty from 66% all in to zero with no official deadline, during a national election, is a sign of need.  No change to Kabuli chickpea import policy.

Many moving parts here including India being positioned to crop year front load Canada and Russia, positional expectation if tariff will be extended beyond Oct 31, lower caliber Kabuli tradeflow shifts/substitution, China pea response.  Russia and Canada will have about two months of opportunity to participate with new crop.  Know that India domestic peas are about US $250/t cheaper today than the first Dec 7-23 pea policy change, meaning replication of $14/bu Saskatchewan seems unrealistic.  More studying needed but for now, safe to assume yellow peas shouldn’t start a downtrend.

 

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Feb 17-23 Yellow Pea Notes

New crop Canada peas reportedly offered US $400/t bulk landed China, about US $45/t lower than old crop bulk.  With an allowance of US $30/t for ocean freight, 0.75 currency, less a comfortable autumn new crop all-in-cost/margin of say C $90/t, trade could bid $11/bu generic SK elevator if (i) needed to and (ii) could sell US $400/t landed China.

Russian origin peas are reportedly trickling into China now, small tonnage.  Do not believe bulk logistics via Black Sea is a practical volume option, as is a volume of inconsistent quality at one time, but believe the truck/rail ground method and acceleration process is engaging.  Peas are not a flax, but it took ~ 3 years for flax to metamorphose into a more meaningful trade shift.  We can now only monitor how snippets of cheaper pea choice alter trade flows and sentiment.  We know China can be a commodity import sponge if price is competitive against another feedstock, but if peas aren’t, then nit-pick emerges.

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June 07-22: Pulses Grinding Along

Situation and prices seem to be in a sweet spot because

(i) Farmers have limited interest to supply-push sell. Why?  Competing crop prices are strong, supplemented with a calendar date where it’s easy to be concerned about agronomic risks.

(ii) Consumers and importers have limited interest to demand-pull buy, rather pick away in hand to mouth fashion. Why?  Financial, logistical & political headaches, anticipation of a cheaper new crop reload with price perceived to be high only because of war.  Further, India is not perceived to be a volume import buying threat, while new crop growing conditions are good enough to justify idling.

(iii) Anticipatory trading demand, which is code for speculative positioning, is subdued because a confident directional price bias is lacking. Between war, politics, logistics, inflation, weather possibilities, benign supply/demands and perception of steady to strong consumptive demand, most cannot deviate from a see how it goes bias today.

Exceptions exist.  Example chickpeas.  Please contact me for more detail.

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Nov 03-21: Pulse Notes

Normally at this calendar point, there is a lot going on in our pulse world.  Not so much this year.  Little is changing but neither are core expectations as described in recent research.  Users got immediate fill late summer and have a handful of reasons to lay low.  Logistics are fueling necessary rationing.  Red lentils have other headwinds like uncertain India policy (stock limits and import tariff), and another import choice, which is Australia that everybody on this planet knows about.  Domestic, including pet food, generally provides bulk of immediate interest.

Anticipated end demand result is this.  Exporters, resellers, brokers and users have reasons to keep positions small.  Trading demand is subdued, yet consumptive demand rolls along.  Instead of more conventional sugar-rush all-or-none moments, anticipatory trading demand is contained.  This instead means a shallower less volatile but elongated trading demand period, that may only convey spunk later winter.  Every pulse has a different tweak and positional starting point.  This has been researched.  Drop me an email for more information.

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India Chana Harvest – Important to our pulse space Feb 27-21

India government released its Second Advance Production Estimates this week for a number of crops.  Chana production, equivalent to desi chickpea type, whose harvest has just begun and will be in full swing last half March, was pegged at 11.6 MMT versus 11.1 MMT last year if believe the government, and 9.5-10.0 MMT if believe the trade.  A number of industry participants believe this year’s chana crop is closer to 9.5-10.0 MMT.  Difference would have significant market implications that apply to all classes of chickpeas, lentils and possibly field peas.  It’s must have knowledge and implications if a Canadian pulse grower.  Shoot me an email and I can shed insight.

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Yellow Peas Jan 7-21

New crop Yellow Pea Price on the Rise:  Using W 1/2 of Saskatchewan as a benchmark, the price journey started with postings equivalent to the high $7’s, then $8/bu and so on.  The analysis in demand bull conditions can be kept relatively simple.  China should buy as many peas at $8/bu as farmers will sell and grain shippers will ship.  Move calendar and shipping slots forward, raise price and on it slowly goes until import arbitrage math into China doesn’t work.

If you would like more detail on this, please send me an email

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