Reduced demand, seller reluctance slow lentil exports


Canada is expected to export about 500,000 tonnes by the end of the crop year, leaving 300,000 tonnes of carryout

Lentil exports have slowed due to reduced buyer demand and a grower willingness to hold onto the crop, says a panel of experts.

Canada shipped out 750,000 tonnes of red lentils between August and December 2020, Rav Kapoor, chief executive officer of ETG Commodities, said during the India Pulses and Grains Association’s recent National Pulses Seminar.

He estimates that leaves about 800,000 tonnes to be shipped between January and July 2021.

Kapoor expects Canada to export about 500,000 tonnes of that remaining volume, leaving 300,000 tonnes of carryout heading into the 2021-22 crop year.

Bangladesh, the United Arab Emirates and Turkey are expected to be the main buyers of the crop with Pakistan, Egypt and Sri Lanka chipping in.

Everything changes if India re-enters the market. That would wipe out any remaining Canadian carryout.

Kapoor estimates 450,000 tonnes of green lentils were shipped between August and December 2020. That leaves 250,000 tonnes to be moved for the remaining seven months of the crop year.

That is not a lot of crop left to ship, which is why green lentil prices have been on the rise.

Kapoor is forecasting a five percent reduction in total Canadian lentil acres in 2021, to 4.06 million acres.

Harsha Rai, vice-president of sales with Mayur Global Corporation, an Indian brokerage firm, thinks India’s lentil crop might be smaller than the government is forecasting.

She thinks farmers will harvest 1.2 to 1.3 million tonnes of lentils, well below the government target of 1.6 million tonnes but close to last year’s output of 1.1 million tonnes.

Two-thirds of India’s lentils are grown in the states of Madhya Pradesh and Uttar Pradesh. Rai believes 30 to 35 percent of the lentil area in Uttar Pradesh shifted into pea production this year.

Rai believes India will still be in the market for lentils this year, but she doesn’t anticipate the same volume of demand as last year. The country imported 875,000 tonnes of red lentils between April 2020 and January 2021.

She said there could still be another 310,000 to 320,000 tonnes of imports. It is unclear whether the time frame she was referring to is the remainder of 2020-21 or if that is the volume Rai is forecasting for 2021-22.

Turkey is another top buyer of Canadian red lentils.

Fatih Tiryakioglu, a board member with Tiryaki Agro Food Industry and Trade, said Turkey imported a record 450,000 to 500,000 tonnes of red lentils in 2019-20, including 325,095 tonnes from Canada.

“It was outstanding demand,” he said.

However, imports have tailed off since then. The country purchased 159,635 tonnes of Canadian lentils between August and December 2020 and another 24,000 tonnes from other origins.

He expects another 100,000 tonnes of imports from Canada through the end of July, for a total 2020-21 program of 270,000 tonnes.

Turkey processes the imported lentils and re-exports the split lentils to customers in the Middle East.

Tiryakioglu said demand has subsided after the first wave of COVID demand. Turkey is now sitting on 60,000 to 70,000 tonnes of excess stocks.

“Demand has been sharply down,” he said.

He expects Turkey will likely grow the same amount of red lentils as last year, while Black Sea acres will likely be up.

Mostyn Gregg, head of pulses with Agrocorp International, expects Australian farmers to harvest 900,000 tonnes of lentils, which is much higher than the official government forecast of 634,000 tonnes.

He said minimal tonnes are trading because farmers are more focused on moving competing crops such as wheat and are not very happy with lentil prices.

“It’s a grower-led grind,” said Gregg.

“The carry at the moment is in Australia, but getting it on a boat is going to be the hard part because it’s going to have to compete with wheat.”

He said there are significant logistical problems in Australia, calling the bulk shipping program “a disaster.”

Gregg warned buyers the time to buy cheap lentils has passed and that prices will have to improve to encourage farmers to move the commodity.