Canadian lentil values are expected to continue their downward price slide in the new year, with demand slipping and ample global supply weighing on values.
"It’s less then flat, it’s going down" said Allan Wagner, managing director of Prairie Pulse Inc. at Vanscoy, Sask., on the price of Canadian lentils in the market.
Much of the ongoing soft trend toward lentils is coming from uncertainty with the global economy, namely the Euro-zone debt crisis, he said.
The ample global supply of lentils is also adding downward pressure on prices, he said, adding that with lots of lentils in the market, consumers are not willing to pay higher prices for them.
With Canadian lentil prices treading down, the export market in 2012 is uncertain. Success for Canadian exports will depend on other producing countries and their crops, Wagner said.
If successful crops come in from India in February and Turkey in March, demand for Canadian exports will fall even further, he said. However, he added, if good crops don’t come in from either India or Turkey, that will add some positive sentiment toward Canadian lentils.
As prices continue to fall heading into the New Year, it will take a lot to boost Canadian lentil values up, Wagner said.
Resolving the uncertainty with Europe’s debt problems would boost positive economic sentiment globally, fuelling new demand, he said. Reducing supply by drawing down world inventory and planting less lentils would be seen as supportive, he added.
The current price for high-quality green lentils is 28 cents a pound, while high-quality red lentils are 16.5 cents a pound, according to data from Prairie Ag Hotwire. That’s down from one month previous, when red lentils were 19 cents a pound and green lentils, 29.