Tight Canadian pea supplies continue to underpin the market, but global macroeconomic concerns may keep prices from strengthening much above their current high levels, presenters said here Tuesday during Crop Week.
Speaking at the Saskatchewan Pulse Growers meeting, Mike Jubinville of ProFarmer Canada and Colin Topham of Agrocorp International pointed to a number of bearish factors limiting the upside potential in peas, including the global economic uncertainty, ideas that Canadian production was under-reported, and a slowdown in nearby demand.
Sales to India typically account for about half of all Canadian pea exports, but have slowed down their demand a little this year. A sharp depreciation of the country’s currency in recent months has reduced the buying power of end users there, said the speakers. Global macro-economic worries have also served to reduce the availability of credit.
India also has incentives in place to increase its own pulse production, but Jubinville pointed out that acres in the country were down this year due to dryness.
Looking ahead to the 2012 crop, Jubinville said peas were pencilling out in the middle of the pack in terms of profitability, and recommended producers show some patience before forward pricing any peas at the low levels currently being offered.
While peas may be in the middle of the pack for all cropping options, Topham said they were the best option amongst the pulses, and expected acres to improve considerably from 2011, when adverse conditions at seeding time limited plantings.