World pulses output set to decline; price likely to remain firm

With planted acreage and crop size set to decline in major origins and exporting countries, world pulses production is most likely to decline in 2011 by about 5 per cent which in turn will result in tighter supplies, said experts at the Canadian Special Crops Association convention here.

World output of pulses in 2010 was an estimated 60 million tonnes. In the current year, the output may fall to nearly 57 mt as a result of lower planted acreage in two of the large exporting countries Canada and the US as well as the world's largest producer India.

With demand from consuming markets expected to stay unabated, tighter supplies would mean firm prices.

Specifically, world pea production for 2011 is projected to decline to 8.7 mt from 10.1 mt in the previous year.

World lentil production is set to fall to 3.9 mt this year from 4.2 mt of last year. Chick pea story is no different with current year output seen at 8.6 mt as compared with last year's 9.2 mt.

In a panel discussion on world pulses outlook, experts pointed out that high price of chana in India tends to boost yellow pea imports into the country. The latter is admittedly the cheapest pulse available in the world market currently.

India has become the world's largest importer of yellow peas with 2010 volume reckoned at 1.5 mt. In the same vein, when Indian masoor prices remain high, Canadian red lentil exports improve. Obviously, given the price sensitivity of Indian market, the products are substitutable at given prices.

Canada, the world's largest exporter of pea and lentil, has been facing weather related problems since 2010. “Pulses will have to compete with other crops such as durum in order to retain acreage,” an expert panelist pointed out adding that Canada needs to expand pulses acreage in 2012, but the crop will have to be remunerative relative to competing crops.

Canadian Wheat Board is set to lose its monopoly status by August 1, 2012. How this would impact wheat production, markets and prices is yet unclear.

The pulses market outlook for 2011 is somewhat bullish. Major origins including Canada, the US and India are beset with supply issues. On the other hand, demand is robust. Very clearly, South Asia in general and India in particular was the focus of attention at the Canadian Special Crops seminar because of the huge consumption demand this region generates.

Expectations in the world market about decline in Indian kharif pulses crop size are running high. As of early July, acreage planted to various pulses has lagged.

To what extent it would be made up remains to be seen. As of now, any estimate of crop size would be speculative.

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