Australia: chickpeas drop, others firm

Subdued demand has seen chickpea prices drop by around 10 per cent in the past month, but faba beans, lentils and mungbeans have traded steady to firmer.

Australian lentils are meeting solid demand as South Asian and Middle East markets look to counter the impact of the drought-reduced Canadian crop, and faba beans are resting on demand from domestic stockfeed millers.

The mungbean harvest is gathering pace in Queensland and northern New South Wales, with quality confined to the middle and lower grades because of late and successive rain on the earlier crops planted up to mid-January.

Across southern Australia, growers have started planting canola, and will move on to cereals and southern pulses in coming weeks.

Subsoil moisture profiles in most districts are good, and planted area for major pulses is not expected to vary greatly from what was sown in 2021.

While chickpea prices are uninspiring, northern growers have few other options to grow in rotation with cereals.

A limited volume of container business is supporting the current chickpea market, with Pakistan the major customer.

Rain-affected chickpeas are finding glimmers of demand from the poultry and pig sectors in northern NSW and southern Queensland, and chickpeas harvested pre-rain and booked some months ago continue to be shipped in bulk, mostly to Bangladesh, out of Queensland.

The northern NSW market is quoted at around $425-$450/t delivered packer, down roughly $50/t on last month in thin trade.

AGT Foods Australia merchant Mitchell Elks said the availability of containers, and space on vessels to ship them, was patchy, and pricing of containerised freight varied widely.

He said workable rates were available on boxes to South Asia, but only for limited numbers.

“A lot of the packers are at capacity based on constraints; everyone’s busy doing sorghum, and if you’re not busy doing sorghum, you’re busy doing wheat,” Mr Elks said

While a considerable proportion of the NSW chickpea crop harvested late last year was downgraded following rain at harvest, some good-quality chickpeas remain unsold and on farm.

Good-quality chickpeas in NSW are hard to price into bulk export out of Brisbane, and Mr Elks said this reflected their exclusion at present from the state’s bulk-handling system.

Newcastle services northern NSW, and both its terminal operators are focussed on grain and canola cargoes.

Domestic stockfeed millers continue to put a floor in the market for faba beans, which are in sporadic demand from export accumulators based on bulk shipment of product to Egypt.

Feed mills in Victoria are paying around $480-$500/t delivered, while the delivered Portland and Adelaide track markets have firmed $10-$20/t in the past month to around $510-$520/t.

“With containers almost impossible to get, or at stratospheric rates , any Egyptian buying would be in bulk,” Agri-Oz Exports Francois Darcas said.

“It feels on the quiet side, perhaps in part due to Ramadan.”

Exports of UK and Baltic faba beans to Egypt have tailed off, and Egypt is expected to turn to Australia when its stocks run down.

“Fabas are very quiet; Egypt is full, and 300,000t has already gone there,” Australian Grain Exports trader Will Alexander said.

Russia’s invasion of Ukraine has caused many countries which normally source grain from the Black Sea to ban exports or reexports, and Egypt, a major reexporter of processed faba beans, is among them.

“Egypt could come back and buy more.”

The lingering impact of Canada’s drought-reduced export surplus has lifted prices for lentils for prompt shipment by $50-$80/t in the past month.

Mr Alexander said some Victorian lentils were going out in containers, but the vast majority of shipments are in bulk to reexport as well as destination markets.

Reexport destinations include Turkey and the United Arab Emirates.

Sri Lanka is normally a mid-tier market for Australian lentils, but its economic crisis has curtailed its ability to import lentils from Australia and Canada.

“They have issues with currency.”

South Australian ports, supported by incorporation of lentils into the bulk-handling system by Viterra and others, means its lentils are featuring in bulk and combination cargoes loading in Port Adelaide, Port Giles and Port Lincoln.

Mr Alexander said Australian growers are selling when spikes in the market appear.

“When there’s a bulk vessel going, they have to go to $1000, and then it drops back a bit.”

“They can wait for high prices; there’s no pressure to sell.

“On the supply side, we’ve got nothing to worry about until Canada has another crop.”

Recent rain in most mungbean-growing districts has bolstered yields for some growers, and impacted quality for many more.

Deacon Seeds general manager Mark Schmidt last week said harvest was kicking off in Queensland, and gathering in pace in NSW where planting was earlier.

Delivered-packer prices have firmed by up to $50/t over the past month, with processing grade now at $1150/t and manufacturing at $1050/t.

Mr Schmidt said deliveries of No. 1 grade, which traditionally sells for $100/t above processing, will be a rarity after the widespread and consecutive rain of recent weeks.

“Quality has been variable; we’ve had processing and manufacturing in, and the best we’ll see is probably going to be processing grade.”

“The rain means discoloured beans that have become brittle after they swell and contract.”

He said yields will be “hugely variable” based on rainfall during the growing season, and deliveries in Queensland have been limited, with patchy rain slowing harvest progress.

“In the trade, we say our busy period is after Easter, but the planting date was spread out from early December to early February, so mungbeans will still be coming in at the end of May.”

Earlier this month, the Australian and Indian governments signed the Australia-India Economic Cooperation and Trade Agreement (AI ECTA).

It is advantageous for lentil exports to India, which are currently subject to a zero tariff until September 30, down from 11 per cent and 33pc previously in recent years for countries other than the US.

India’s tariff on US lentils is currently 33pc, down from 55pc previously, while its tariff on chickpeas from all origins stands at 66pc.

India has traditionally been Australia’s biggest market for chickpeas.

Grain Producers Australia (GPA) chair Barry Large said the deal was a good starting point, but the Australian Government needs to continue its push to remove trade barriers on chickpeas and wheat.

“We understand this initial deal will have entry into force in the second half of 2022 and comes with the intention for Australia and India to finalise a comprehensive agreement by the end of the year to secure even broader outcomes,” Mr Large said.

GPA has provided details of the AI ECTA, and said tariffs on oats and barley have been bound at zero, meaning India will not be able to raise tariffs on these Australian exports in the future.

India has also agreed to a 50pc tariff cut on Australian lentils if the tariff is raised above zero on a quota of 150,000t.

GPA said this provided a competitive advantage over any other exporting country for the first 150,000t exported.

Tariffs will be phased out over seven years on: broad, kidney, adzuki and split beans; safflower, sesame, linseed, sunflower, palm and poppy oil, and crude low-acid canola, olive and palm oils.

Tags: markets, faba beans, demand, mungbeans, Australia, export, lentils, prices, chickpea, shipments