The devastating hot, dry conditions that have scorched U.S. corn and soybean crops have largely missed North American legume-growing areas, Alliance Grain Traders said Wednesday.
Softening demand, due to a lack of available credit among importers of legume crops such as lentils, chickpeas and peas, hurt Alliance’s earnings earlier this year, but crop problems have now helped stimulate demand, CEO Murad Al-Katib said.
"This year, our North American crops look very positive, as we have been relatively unaffected by the drought conditions," he said. "Pulse and staple foods markets appear to be signaling towards a gradual and steady recovery."
The drought’s impact on U.S. crops, as well as diminished farm prospects in India due to lower rainfall than usual, look to raise the average cost of protein sources globally, the company said. Legume crops are high in protein.
Alliance, one of the world’s biggest legume traders and processors, reported a return to second-quarter profit on Wednesday.
Net earnings for the quarter ended June 30 rose to $1.7 million from a net loss of $3.9 million a year earlier.
Revenue for the Regina-based company rose 19 per cent to $201.8 million.
Analysts had on average expected Alliance Grain to earn nine cents a share on sales of $190 million, according to Thomson Reuters I/B/E/S.