(Commodity News Service Canada) — Pea producers have seen a bullish start to the marketing year, but may want to “get in while the getting is good,” according to one analyst.
Chuck Penner, founder of LeftField Commodity Research in Winnipeg, said strong demand from exporters has been underpinning values of late.
“The short-term outlook is fairly strong,” Penner said. “We’ve had a fabulous export pace up to this point in time, and it’s really taken a lot of supply out of the market and kept prices supported quite well.”
Most of the exports have been going to India, while Pakistan, Bangladesh and China have also shown strong demand for peas.
While the short term looks favourable, when asked how long the bullish momentum would continue, Penner said prices would likely hit a plateau in the next month or two.
“India is looking at a bigger pulse crop coming off the field in February or March, so their demand might slow down a certain amount around that time, but that might actually be a good thing as we are running out of exportable supplies,” he said.
“Prices should stabilize around that time and may even decline a little bit.”
Most of the product being bought by the Asian nations are yellow peas, as they tend to fit their traditional market better than green peas do, he said.
“Green pea demand is more scattered around the world among a larger number of customers, so it tends to be more stable and doesn’t see these surges in demand like in yellows,” he said.
Even though prices have been strong, Penner said early indications are for a smaller crop in 2011 across Western Canada.
“The problem is we have very high prices in canola, flax and other traditional grains and those are probably going to take away some acres from peas,” he said. “I actually expect to see pea acreage drop by a few hundred thousand acres this year.”
In 2010, there were 3.425 million acres of peas seeded in Canada.
Deliveries for yellow peas were bringing as much as $6.86 per bushel, while green peas were bringing as much as $7.50 per bushel, according to Prairie Ag Hotwire.