Market outlook for chickpeas and lentils

The coming year heralds the promise that chickpeas and lentils will hold at the improved price levels reached at the end of last year. However, markets are likely to remain volatile and driven by developments in India – the world’s largest producer and consumer of pulses – says agribusiness banking specialist Rabobank.

With future pulse price swings set to be driven by any changes in Indian supply, Rabobank senior grains and oilseeds analyst, Dr Cheryl Kalisch Gordon, says India has ramped up support policies and programs over recent years to increase its pulse production in the pursuit of attaining self-sufficiency.

“We’re looking at a situation where we have seen a significant uplift in India’s pulse production over the past couple of years,” Kalisch Gordon said. “A lot of this has been put down to the ‘monsoon effect’ – a couple of favourable years of monsoon – and while that is overridingly still the biggest driver of production in India, there have also been increases in productivity due to government support programs and increased price support which has encouraged production.”

Discussing the outlook for the pulse market in 2019 in a two-series podcast, Checking the Pulse, Kalisch Gordon said this “massive jump” had seen India’s pulse production increase from 16-17 million tonnes in 2016/17 to 23-24 million tonnes in 2017/18.

Kalisch Gordon said Rabobank believed the excess domestic pulse supply seen in India in the past two seasons would continue in 2018/19 as well, though with a likely lower surplus. “And until we see a major disruption in their domestic production, it is unlikely India will be back in the market again as a significant pulse importer,” she said.

India’s domestic supply was, however, still highly dependent on the monsoon and weather in general, Kalisch Gordon said. And current dry conditions, together with a reduction in Indian (rabi) pulse plantings – down around 10 per cent on last year according to Indian government data – could see this year’s overall crop come in seven to eight per cent lower than last year.

“If the so-far less-than-favourable monsoon season continues, we could see India come back into the market looking for imports,” she said.

Any changes in government import policies would also have a bearing on prices, Dr Kalisch Gordon said. “For changes in policy though – such as the extension of temporary bans, the opening of doors for any imports like yellow peas or the removal of tariffs – we expect we’ll need to wait until closer to the middle of 2019 and after Indian general elections,” she said.

In light of the current situation in India, Kalisch Gordon said, pulse markets would “continue to be on a rollercoaster”, but one that had a positive trajectory given growth prospects for the Indian market for pulses.

Lentils studied as key ingredient to making bread healthier

Functional Grains Centre PhD candidate Drew Portman is researching the use of lentils to make a healthier bread than types using traditional flours.

Portman’s research, carried out with Agriculture Victoria, is investigating how lentil flour can be incorporated into wheat-based foods, such as bread, pasta or snacks.

“Lentils are widely consumed within Indian subcontinent and that’s where the bulk of the product grown in Australia is exported,” said Portman.

“Although lentils are gaining popularity as a food source in western diets, wheat is the staple grain used for manufacturing food products.

READ: Littleproud to visit India to discuss agricultural tariffs

“That means many of us are missing out on the nutritional benefits of lentils as they’re a great source of protein and the essential amino acids,” he said.

Pulse Australia and AgriFutures Australia reports that the Australian lentil industry produces on average between 400 and 600 tonnes of lentils per year, most of which is exported.

Lentil production in Australia has expanded from less than 1500 hectares in 1994 to more than 270,000 hectares.

The research at the Agriculture Victoria Grains Innovation Park, in Horsham involves testing the rheological and baking properties such as loaf volume and crumb structure but also examining the nutritional and chemical properties for potential health benefits of the final product.

“My research so far has shown that blending lentil and wheat flour improved the nutritional quality of bread.

“Optimising the blending ratio limited the deleterious effect on rheological properties resulting in acceptable loaf volume and crumb structure,” said Portman.

“Using a lentil and wheat flour mix in bread has the potential to make a product that most of us eat every day more nutritious.

“We hope this will also provide a higher-value market for lentils that are split or damaged during processing and currently sold as stock feed,” he said.

Portman’s research is supervised by Functional Grains Centre director professor Chris Blanchard,  Dr Joe Panozzo from Agriculture Victoria, professor John Mawson from Plant and Food Research New Zealand and Dr Mani Naiker from The Australian Catholic University.



Indian tariffs will hit Australian pulse trade hard

A new 30 per cent tariff on imports of chickpeas and lentils to India will hit Australia’s two most important pulse crops hard in the middle of the harvest season when much of the export trade is getting under way for the year, Pulse Australia says. Read more

Australian lentil crop doubles previous record

Australia is strengthening its position as a major exporter of lentils following a bumper crop.

Latest figures from the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) show lentil farmers Down Under harvested a record 620,000 MT of mainly red lentils late last year, double the previous record of 310,000 MT set in 2010.

The majority of the crop was grown in South Australia (420,000MT), which increased its yield to 2.95MT per hectare in 2016/17 from 1.58MT per hectare in 2015/16 thanks to excellent winter rainfall.

The record result was also helped by an 11 per cent increase in hectares planted in South Australia and Victoria, the only lentil-producing states, to 253,000 ha.

Australia is now among the biggest producers of the soup-and-curry pulse behind India, the biggest lentil consumer, and Canada. More than 90 per cent of Australia’s lentils are exported to countries including India, Bangladesh, Sri Lanka and Egypt.

Pulse Australia CEO Nick Goddard said high global prices in recent years driven by poor seasons in India and low wheat and barley prices had convinced more Australian farmers to plant lentils.

He said although prices had fallen from the recent spikes of more than AU$1000 a tonne in 2015 they remained above long-term averages.

“They are still an attractive proposition for growers in Australia relative to wheat and barley,” Goddard said.

“Last season was certainly a record in Australia by a long shot … the extra rain had a very positive affect in almost doubling the yield.”

South Australia is well suited for growing larger red lentil varieties that are proving popular in India and Sri Lanka.

“We compete head-on with Canada on the medium size but there’s a large variety called Jumbo we produce that really does have a strong place in the market over there,” Goddard said.

Farmers in Australia are also turning to pulses as a means of improving soils while rotating fields away from traditional cereal plantings.

The United Nations declared 2016 as the International Year of Pulses sparking a campaign to increase domestic consumption, including the launch of Australia’s first lentil beer.

Australian lentils are harvested and processed in November and December, taking advantage of a window between the Canadian (August/September) and Indian (March/April) harvests.

AGT Foods Australia is a leader in value-add processing of pulses.

CEO Peter Wilson said although prices had stabilised to about AU$650 a tonne, they were at a level where they were trading internationally, which was “a good thing”.

“The great thing about red lentils is that they have fairly broad and deep markets around the world,” he said.

“The red lentils are relatively stable at the moment. We’ve got to be striving for really good quality all the time so we encourage farmers to continue to invest in the product to ensure we can position it to the highest paying market.

“I think we’ll continue to see good growth based on profit – farmers are going to plant things that are going to make them money, that’s the bottom line.”