THE PRICE outlook for red lentils looks relatively stable in the near term, regardless of what the Australian, Canadian and Indian seasons throw up, according to the first industry panel to take the stage at Pulses 23.
Discussing the red lentil market at Pulses 23 was a panel of eight, comprising AgPulse Analytica principal Gaurav Jain, Canada’s Marina Commodities CEO Farhan Adam, Armada Foods CEO Fethi Sonmez, Türkiye, Glencore India head of pulse trading Saurabh Bhartia, Mandala Trading director Umang Bagaria, Sydney, AWAM Group CEO Muhammad Ahmed, Pakistan, Agrocorp trader Brajesh Panda, and Al Amir Food Industries managing director Yasin Ranani, UAE
Despite big crops in Australia, Canada and India, and good production prospects for the coming season, strength in the Indian domestic market and South Asia generally is seen as able to comfortably absorb volumes at at least current values.
Global increase tipped
AgPulse Analytica figures put 2023 global red lentil production at 7.1 million tonnes (Mt), up from 6.7Mt in 2022, and 2023 trade at 4.6Mt, up 300,000t from 2022 to reflect the increase.
Despite buffer stocks estimated at 198,000t for 2023 representing a turnaround from a deficit in 2022 of 58,000t, panelists agree nothing overly bearish can be found in the world outlook.
Imports for Bangladesh, Nepal, Sri Lanka, Pakistan and the UAE are seen collectively at 1.165Mt, up from 1.091Mt in 2022.
India’s production at 1.59Mt in 2023-24 is up considerably from 1.269Mt in 2022-23, and imports are expected to drop from 858,000t to 710,000t in response.
Mr Jain said a widening spread between lentils and pigeon peas in India could boost demand for the former.
“If the price of pigeon peas goes up, we will see more substitution,” Mr Jain said.
Smaller Australian crop seen
Mr Jain has pencilled in new-crop Australian production at 909,000t, down from a record 1.25Mt in 2022-23, and exports are forecast to fall to 950,000t from 1.2Mt.
He said industry estimates for Australia’s record current crop sit between 1.1Mt and a startling 1.8Mt.
“This is where things become interesting.”
ABARES, the Australian Government forecaster, puts the 2022-23 crop at 1.4Mt, and will issue its first 2023-24 estimate next week.
“El Nino is a threat if it intensifies.”
Mandala Trading director Umang Bagaria said subsoil moisture was “pretty good” in the main lentil-growing states of South Australia and Victoria, and another big crop looked like being planted on the back of the solid market.
“In terms of prices, lentils are a standout for farmers,” Mr Bagaria said.
“I think prices are going to be sideways, and maybe a notch up.”
While Australia has exported more lentils in a six-month period than ever before, Mr Bagaria believes there is plenty more to go.
“I think there is a large amount of crop out there to be sold and exported.”
Mr Ahmed said the price of lentils is currently at around US$650/t c and f in Pakistan.
“This is well below what we can replace them for out of Australia and Canada,” Mr Ahmed said.
Bulk as well as boxed arrivals have allowed Pakistan to build up stocks.
“June, even first-half July is often tough for us.
“From the end of June, demand should start to heat up.”
Yasin said demand for red lentils normally drops over the summer months, and that he expected prices to range from $650 to $750.
“We don’t expect it to go below that.”
Mr Panda sits in the middle ground.
“I would see in the sub-continent, it is not going to come down below $700/t,” Mr Panda said, adding the shape-up for new-crop would depend on Canada’s and Australia’s seasons.
“New-crop after July or August will become a bit tricky.”
“I don’t see there is much downside.”
Source: Grain Central