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Global Factors At Play In The Lentil Market

Each spring, the world’s pulse importers and exporters meet at the International Pulse Trade and Industry Confederation annual convention. Topics range from sustainable production, environmental issues, quality and trade issues, weather conditions and, of course, available volumes and potential supply from the major production regions.

Here are some of the highlights from the program, blended generously with my opinion on how some of the issues discussed by the world industry could impact Canadian growers.

PRODUCTION LEVELS

At the time of the convention, by all accounts, pulse production all over the world seemed positive. India and Turkey both appeared to be having good seasons for production. It seems the reports of frost in India were overcooked and very little, if any, damage resulted. Since then production in Turkey is now coming in and appears short of earlier estimates of more than 500,000 MT; it is likely in the 350,000-MT range which would cover domestic usage leaving little, if any, for export.

Here at home, seeding had begun with Statistics Canada reporting earlier in April an intended 2.7 million acres of lentils. Most in the Canadian industry agreed then that due to excess moisture in some of the lentil-growing regions and positive values for other crops this number could be 2.2 million or even less when all is said and done. It now appears that acres were somewhere in the two-million range, and due to extremes in moisture many of these acres have a lackluster appearance.

What could this mean? While there are still large volumes of whole red lentils in store both in Canada and around the world, what is the quality? Canada’s stocks are bound to be somewhat homely from last year’s harvest, as is Australia’s carryover. With a likely reduction of acres in Canada, potentially below one million acres of reds, and those acres looking beaten up there is reason for optimism in the price of whole red lentils. Shortfalls from other production regions that have helped prices in recent years are likely not as great this year as in a couple of the more recent seasons. I do however have optimism that the price of reds will firm moving forward. I would avoid selling in the low 20s and see what Mother Nature brings in the next few weeks.

Green lentils are a similar situation. Stocks of high-quality lairds are essentially non-existent. Neither growers nor the world trade are sitting on significant stocks. Again, we will see significantly reduced acres in Canada. If you were fortunate enough to have your lentils in the ground early you have the potential for very positive results. Goodquality No. 1 and No. 2 lairds will, in my opinion, be at similar levels as were all season last season, firm to firmer. I would not sell any large green lentils if the number didn’t start with a “30” and as stormy, extreme weather continues the low 30s look less appealing every day.

GLYPHOSATE AND THE EUROPEAN MARKET

Much has been made of glyphosate residues found in Canadian lentils resulting in trade barriers into the EU. There was lots of discussion on this during the convention. What should farmers be aware of?

There are three significant points on this issue:

1)There is not necessarily any reason you must stop using glyphosate as a pre-harvest treatment for lentils. The trade barrier only impacts product destined for the EU. While the EU is a strong trading partner there are many other destinations for your production, but the use of glyphosate may limit your delivery and marketing options, so be prepared for some impact as some buyers may shy away from your production.

2)If you chose to use glyphosate as a pre-harvest treatment (this is pre-harvest only, pre-emergent burn-off will not result in residue) do two things. First, follow the label directions. Not following directed use can result in maximum residue limits above the Canadian level of four ppm making your production unusable in any market. Second, be prepared to declare this to the buyer of your lentils; all buyers will likely be asking for declarations of use and proper use.

3)There is little need for panic. This is very likely a short-term issue. There is precedent in field pea with a glyphosate residue allowance of 10 ppm. There is strong belief among European importers that the tolerance will be adjusted when the sound case is made. This process could take up to 12 months and there are no guarantees of change.

Both Saskatchewan Pulse Growers and Pulse Canada have provided details on their websites that can aid you in your decision-making. If you have any questions I would advise you to contact them directly.

BLENDING POOR QUALITY

A quick note on 2010 leftovers of poor-quality, whole red lentils. Just like my old grandma used to sneak a mixture of all kinds of leftovers into a casserole and pass it off as something new, buyers around the world feel they may end up with a mixture of old poor-quality 2010 lentils and good new-quality 2011 production. Canada’s reputation for quality took a significant tumble last season for reasons beyond our control. If you are holding low-quality stocks with the hopeful intention of blending them my advice is to think twice. Red lentils are used primarily for milling, variant qualities do not mill well. Why give our reputation another knock if we don’t need to?

That’s what I found of interest and of likely real impact to your operations. I am hopeful the weather will settle down giving a positive growing season for all. Looking forward to discussing these or any market issues with you.

JeffJacksonismarketingmanager,pulses forScoularCanadabasedatCalgary,Alta. Contacthimat [email protected] The opinionsabovereflectthewriter’sandarenot necessarilytheopinionofScoularCanada.

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