Large, poor-quality lentil stocks to weigh on values

While nearly all crops in Canada saw a loss in stocks from the same time one year ago, lentils were an exception, and a large exception at that. Large supplies, together with the fact much of the stocks are of poorer quality, should weigh on prices and lead to fewer acres this spring.

According to Statistics Canada, there were 1.467 million tonnes of lentils in Canada as of Dec. 31, 2010, a 78 per cent increase from 823,000 at the same time one year ago.

Cam Laxdal, general manager of Lakeside Grains in Winnipeg, said the increase in product will likely result in a decline in value.

“It hasn’t happened yet, but I would say it probably will, although it’s hard to say just how much of those lentils are feed, and which ones are waste,” Laxdal said. “No one is quite sure of that. A good chunk of those lentils are going to go the feed market.”

Plenty of stocks isn’t expected to be the only issue hurting the market. Laxdal said buyers have not been impressed with the shipments they have been receiving from Canada, and as a result, demand is tentative at the moment.

“In places like Bangladesh, they are not very happy with the product they have,” he said. “There has been a number of complaints from just about every shipment, so those people will be very careful when they come back into the market, and I think the same will go with India and Pakistan.”

In an effort to rectify this, Laxdal said importers have been asking for pre-shipment samples and official grading now more than ever.

“A lot of product has to be put on official grades before it leaves the country. Things like wrinkle seed coats are not a factor here, but when they get to their destination, it’s important to them,” he said.

The large amount of stock and an expected weakening in the market is likely to persuade producers to plant less acres of lentils come the spring.

“There were a lot of lentils planted into the black soil zones last year, and I think those guys didn’t have a good experience,” Laxdal said. “For some it was their first time growing the crop. Those acres will be lost, or revert back to traditional crops in the zones.”

There were about 3.34 million acres planted in Canada in 2010, according to Statistics Canada.

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