(Resource News International) — The next two to three months will be a good time to sell both red and green lentils, as prices are expected to trend mainly sideways at current levels before dipping as summer approaches.
Greg Simpson, president of Simpson Seeds Inc. at Moose Jaw, Sask., said at 37 cents a pound, the tone for red lentils is firm. He expects values to trade mainly sideways into the spring.
In February, though, all eyes will turn to India, where the Rabi (spring) lentil crop will be harvested, Simpson said. As it stands, the impact of India’s lentil harvest on the global market should be limited by the export ban put in place by India’s government, but no one knows whether they will decide to lift it, he said.
“And even last year with the ban, we found that they were illegally leaking lentils out of the border into the North. Those lentils came into the market quite a bit cheaper and depressed the market,” he said.
The other country to watch will be Turkey. Simpson said the Turkish government is sitting on roughly 40,000 tonnes of lentils, which they’ve suggested they would be inclined to release into the market should domestic prices climb too high.
That could “keep a lid on the market as well,” he said. The industry will also be waiting for news about Turkey’s lentil harvest in May.
“If it is good, then they will be very competitive because their lira is very devalued and that allows them to export cheaply into the world. So, my view is that in February, March, maybe into April we could stay at these levels but when the Turkish harvest comes in, and assuming it is normal, I would expect markets to come down,” Simpson said.
As for the green lentil market, Simpson says prices may improve in the near term before trending sideways into the spring and then easing downward into the summer months.
Mexican demand for Eston lentils is already picking up and Morocco is expected to enter the market as well within the next month or two, he said. On the other hand, there is still a fair amount of stock in Canada and the demand is coming late in the crop year.
Simpson said Laird prices could remain steady right through to July as long as South American demand picks up and Algeria enters the market. For the latter, he said, he’s fairly hopeful.
However, for both red and green lentils, Simpson predicts price sensitivity will continue to encourage hand-to-mouth buying by many countries, which has been the case this year not just for lentils, but for most pulse crops.
“That is the reality out there in global markets. Places like India and Sri Lanka are very price-sensitive, as are other emerging markets in North Africa and in South and Central America,” he said.
Acres seen increasing
The weakening of red and green lentil prices in spring will partly be the result of 2009-10 acreage expectations, according to Simpson.
He believes the amount of land seeded to lentils could rise as high as two million acres from 1.57 million in 2008-09 as more prairie growers move away from planting peas.
“Pea prices are down quite a bit and there are good supplies of peas, so some of the farmers who would look at $5 peas versus 20-cent lentils, for example, will quickly say that lentils look more profitable,” Simpson explained.
While a 400,000-acre increase in seeded land sounds potentially burdensome, the higher amount won’t be a “big deal,” because the production base in Western Canada is much more balanced between reds and greens than it was even just four or five years ago, Simpson said.
More Canadian growers are turning to red lentils due to improved varieties, a wider availability of calibres suited to individual markets and the recognition that, worldwide, more red lentils are consumed than green lentils. Also, interest in reds has picked up because their shape works well for the milling process, he added.