Pulse weekly outlook: Yellow pea demand continues to rise

Yellow peas. (Victoria Popova/iStock/Getty Images)

MarketsFarm — This St. Patrick’s Day, it’s not easy being green if you’re a pea. Having reached price parity less than two months ago, Canadian yellow peas are now trading at a premium.

According to Prairie Ag Hotwire data from Wednesday, high-delivered bids for yellow peas are now priced at $11.25 per bushel, $4.16 (59 per cent) higher than at the same time last year. Meanwhile, the price of green peas has dropped $1.50/bu., or 13 per cent, to $10.

Like barley and corn from North America, the yellow pea is yet another crop seeing larger shipments go to China as it repairs a hog industry decimated by African swine fever.

According to Canadian Grain Commission data, 1.3 million tonnes of peas were exported to China during the 2020-21 crop year up to the end of January, 33.5 per cent more than at the same time last year. Also, 204,800 tonnes of peas have gone to Bangladesh, 17 per cent more than last year.

“They’re trying to build up their swine,” Dale McManus, a trader for Johnston’s Grain at Welwyn, Sask., said. “They’re buying a lot of peas to feed them.”

“China has a shortfall on tonnage and they’re playing catch-up right now,” Kent Anholt, a trader for Rayglen Commodities in Saskatoon, said, adding that 80 per cent of Canadian yellow pea exports are going to China.

Mike Jubinville of MarketsFarm also mentioned the pea processing industry has grown in Western Canada and the crop is increasingly being used for feed to fill the void left by other depleted crops such as barley.

While he projects at least 3.5 million tonnes of Canadian peas going to China this year, other players have also emerged. Chile imported 68,000 tonnes of Canadian peas in January alone, more than twice as much as China. Ukraine and Russia have both upped their own pea exports to China in response to wheat tariffs, but Jubinville doesn’t believe they will affect the amount of Canadian exports until the next marketing year.

“It’s going to take another growing cycle just to get to a point where we start seeing overproduction issues and I don’t see that happening immediately,” he added. “There’s plenty of room in the Chinese market to incorporate more peas from other sources.”

Despite stronger pea prices, Jubinville expects similar seeding numbers (4.25 million acres) for peas in Canada compared to last year, as it competes for acreage against other high-priced crops.

“Historically, (the new pea crop price of) $9/bu. is a profitable price, but is it enough of an incentive to really encourage a lot of new acres to come in relative to the canola, the barley, the oats and the wheat? No, it’s not.”

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.

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