Summary
Pulses internationally are in demand, and supply is struggling to keep up for several reasons. UK (bean) and French (pea and bean) acreages and yields came down significantly last year, as did pea crops in Canada where they have been selling the large carryover in almost record volumes to India, China, and Bangladesh. Also USDA reports a 60% loss of US field pea acres from 2010 to 2011. Severe frosts (-10C) in France have also affected winter crops, which were unusually ahead of themselves after mild weather.
The result is an unusually unstable market with prices of beans increasing dramatically since the New Year.
The general shortage of beans is likely to last for another year or more with little prospect of UK or France increasing production in the short-term due to competing wheat and oilseed rape prices ensuring they take priority in the rotation.
UNIP in France notes that EU bean production at 1.1MT in 2011 fell 22% on the previous year. Unless production can be increased quickly in the UK, crucial export market share will be lost which will be difficult to recover. China too is seen as a large new import market for human consumption pulses.
Feed Beans
Soybean prices rose on news of the Argentinean drought, increasing protein prices for UK feed. PGRO has been out extolling the results of the Green Pig project to five roadshow audiences made (even more) sceptical by the current price and availability of beans.
The promotion of a beans + rapemeal mixed feed attracted interest, and compounders have been having to pay well over £200/T even for feed quality beans. It is clear that if beans are to become a serious option for UK pig feed, a radical increase is needed on the production/supply side and, without encouragement from either Defra or the CAP reforms, prices will need to be competitive with soya meal.
Human Consumption Beans
Last month’s predictions of bean shortages have come true. Markets took an extraordinarily volatile turn recently with prices rising £50/T to well over £300/T for the right quality. Export quality standards for Bruchid infestation have had to be modified to keep up with demand from Egypt and Sudan.
Australian crop has now been all but shipped out and there is still demand to be met. UK 12-month exports of some 175,000 tonnes are now looking more respectable. Although new crop prices too are over £190/T, the uncertainty of acreages and weather/yield issues means there is little forward business.
Combining Peas
UK Seed sales of blues and yellows have been more encouraging this month with growers hearing the messages about good pea yields in a dry year.
Recent imports of French yellow peas at good prices have also helped prompt the renewed interest. With feed beans hard to find, it is likely that protein pea demand will increase for this sector - but ample French supplies could cap the price. There are new crop buy-back contracts available for yellows and blues.
Marrowfats
There is still little trading activity to report, with a large stock carried over from last harvest and further carry over this year.
It is unlikely that marrowfats will trade at a significant premium to other types, although good marrowfats will always command higher prices than good blue peas. With high protein feed prices, maybe even this sector might yet take up some of the stock.
