In-depth coverage of the lentil and dry bean market outlook panels at this year’s Global Pulse Convention.

By Dario Bard

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From May 19th to the 22nd, more than 650 pulse industry professionals representing at least 45 countries converged in Çeşme, Turkey for the 2016 Global Pulse Convention. The annual gathering, organized by the Global Pulse Confederation, is the international pulse industry’s preeminent event and was particularly special this year given the United Nation’s designation of 2016 as the International Year of Pulses (IYP).

“We covered everything from peas to pigeon peas to mung beans,” said Global Pulse Confederation President Hüeysin Arslan, adding “One feature of this convention is that the official government representation was the highest ever. The number of sponsors was also impressive.”

Arslan delivered the event’s opening remarks, underscoring the production challenge facing the global pulse industry. “In the next 40 years, we need to produce the equivalent of all the food produced in the last 10,000 years,” he said.

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Photo: Food Security Risk Index 2013

A notable lineup of government officials (click to watch the Youtube video) then addressed the audience. Shri Avinash K Srivastava, the Secretary of India’s Ministry of Food Processing Industries, gave an overview of his country’s pulse market and reiterated Arslan’s point about the growing global pulse production deficit; he also spoke about his government’s efforts to boost domestic pulse production, including revisiting the ban on pulse exports, which has been dampening grower interest in pulses, and investing in research projects, including the development of genetically modified pulses. He was followed by Jesús M. Silveryra, Argentina’s Under Secretary of Agricultural Markets, who spoke of his country’s pulse production potential and the measures his newly inaugurated government has taken to strengthen agricultural exports, including the normalization of the foreign exchange rate and the lifting of export duties. Rishad Bathiudeen, Sri Lanka’s Minister of Industries and Commerce, highlighted the market opportunities offered by his country, particularly for red lentil exporters. Lastly, Faruk Celik, Turkey’s Minister of Food, Agriculture and Livestock, welcomed attendees to Turkey and spoke of his country’s important role in the pulse trade.

Robynne Anderson of Emerging Ag took to the podium next to update attendees on IYP activities (click to watch the Youtube video). She began with a rundown of IYP’s successful social media campaign: 300 million impressions across all relevant hashtags; 5.2 million active engagements; and 2.6 million video views. Additionally, this past January IYP got off to a strong start with 141 Pulse Feast events held in 36 countries; collectively, they had a social media reach of 21 million people. Other speakers included ICARDA Director General Dr. Mahmoud Solh and former GPC President and the “father of IYP” Hakan Bahceci, among others.

Pulse Canada CEO Gordon Bacon then gave a presentation on building the global pulse brand (click to watch the Youtube video). He began by unfurling an IYP flag and went on to discuss the IYP logo’s versatility in terms of its use in promotions and product labeling.

“I am quite amazed at the amount of participation,” said Allison Ammeter, Board Chair of the Alberta Pulse Growers, about this year’s Convention. “Particularly in the market outlooks. The place is packed. People are engaged.”

The market outlooks were undoubtedly the most eagerly awaited presentations. Below, IFT provides readers with in-depth coverage of the lentil and dry bean market outlooks. The chickpea and dry pea market outlooks will be provided in Part II of our Global Pulse Convention coverage.

Green Lentils

The green lentil panel was led by Gerald Donkersgoed of Ilta Grain, who began by offering an overview of the green lentil market. By way of a benchmark, he cited the 2015 production figures for the major origins:

  • Turkey: 20,000 MT
  • Canada: 600,000 MT
  • U.S.: 180,000 MT

He then went on to discuss North American green lentil production estimates for 2016.

North America: Donkersgoed reported that the Canadian crop moved fast in 2015, practically emptying stocks and leaving the industry wholly dependent on the 2016 harvest.

On large green lentils, the 2016 crop is estimated at 655,000 MT; an old crop carryover of 12,000 MT brings Canada’s estimated large green lentil supply to 667,000 MT with export availability of 493,700 MT. However, Donkersgoed pointed out that this 2016 production estimate is based on a five-year average yield that factors in the unusually high yields of 2013, which, Donkersgoed argued, should be considered an outlier; consequently, he suggests adjusting this estimate downward by 50,000 MT. Therefore, Canada’s large green lentil stocks will be tight in 2016, he concluded.

On medium and small green lentils, 2016 inventories are estimated at 38,000 MT and 219,000 MT, respectively. On medium lentils, the export availability is estimated at 28,200 MT; on small lentils, it is estimated at 162100 MT. Donkersgoed sees good movement on medium green lentils, but said that strong demand for small green lentils may encourage some growers to hold back product and wait to see how prices evolve.

In the U.S., lentil production statistics are not broken down by type. But historically green lentils comprise 75% of total U.S. lentil production. For 2016, the total U.S. lentil crop is estimated at 450,200 MT with 356,000 MT available for export. Again, Donkersgoed believes these numbers are distorted because they are based on calculations that factor in the atypically high yields of 2013 and because this year is marked by many first-time lentil growers who are likely to see less than optimal yields.

In short, Donkersgoed sees green lentil stocks improving this year, but not to burdensome levels. He believes disciplined sellers will keep prices firm through November. Thereafter, the trade may see prices erode slowly.

Greece: Nico Georgeoglou of Elamer S.A. addressed green lentil demand from Greece. This country of 11 million people consumes 14,000 MT of green lentils per year. Domestic production covers half of that demand. The other half is covered through imports. Canada provides 80% to 90% of Greece’s lentil imports (small and large green lentils), with the U.S. providing the rest (richlea lentils). Because Greece is a price-sensitive market, high prices have limited import volumes in 2016. Greek buyers are rooting for a good crop out of North America and hope that sufficient volumes of competitively priced green lentils will remain after India takes it share. Georgeoglou believes prices will weaken as the crop year progresses.

India: Harsha Rai of Mayur Global Corporation spoke about the current situation in India, where the government has intervened in pulse markets in an attempt to check the increase in prices. Stocks are low across many pulse crops, with green lentil inventories especially tight. However, the government is much more concerned about pigeon pea prices and therefore has not intervened in the green lentil market. With the current situation being what it is, India’s pulse industry eagerly awaits the next pulse crop. For now, Indian buyers have pre-contracted supplies to carry them through November. Even after November, Rai believes demand out of India will continue to be limited, with buyers waiting to see if monsoon rains return to normal levels now that El Niño has faded.  

Dubai: With the lifting of the international trade sanctions on Iran, Atheeqe Ansari of Emco International addressed how this development might affect Dubai’s future as an important green lentil distribution hub. Much of the pulse trade that passes through Dubai ends up in Iran, admitted Ansari. Iran, he noted, is a big buyer of green lentils. Its green lentil imports come mainly from Canada. In 2015, Iran managed to import between 110,000 MT and 150,000 MT of green lentils, including 60,000 MT of Canadian lentils, despite the sanctions. With the sanctions lifted, Ansari sees Iran importing a similar volume of lentils in 2016. However, due to high green lentil prices, the trade may see Iran shift to red lentils. Lastly, although the sanctions have been lifted, Ansari believes Iran will likely continue to rely on Dubai as a redistribution hub because of a myriad of logistical and bureaucratic hurdles that must first be addressed before direct trade becomes a possibility.

Spain: Pedro Alvarez of Legumbres Penelas S.L. reported on Spain’s green lentil market. Spain’s domestic lentil production is unreliable, he said, with yields ranging from 600 kg/ha. to 1,200 kg/ha. depending on varied weather conditions. Due to the unpredictability of its homegrown lentil crop, Spain is dependent on imports. Typically, the country imports 60,000 MT of green lentils per year, mostly from Canada and the U.S. This year, however, Spain is expecting a good crop off ample rainfall. Therefore, he expects Spanish buyers to be hesitant early on and to wait for prices to decline before making purchases.

Video: Global Green Lentils Outlook (Global Pulse Confederation)

Red Lentils

Gaetan Bourassa of AGT Foods led the red lentil market outlook discussion. He began by citing FAO figures that show total world lentil production has been trending upward since 1993 and is projected to hit the 6 million MT mark in 2016. Of that amount, an estimated 75%, or 4.5 million MT, will be in red lentils.

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Photo: Global lentil production (slide by Gaetan Bourassa, AGT)
 

Bourassa estimates the red lentil trade in 2016 at 2.5 million MT, with India and Turkey, the major buyers, taking 1.2 million MT and 350,000 MT respectively. However, India may import even more red lentils, Bourassa believes, as a substitute for pigeon peas.

Red lentil production is barely keeping up with demand, he said, with limited carryover year after year. Bourassa provided the following red lentil production estimates from the major origins:

  • Canada: 2.5 million MT, of which 2 million will be available for export
  • Australia: 400,000 MT
  • US: 60,000 MT
Video: Global Red Lentils Outlook (Global Pulse Confederation)

Dry Beans

Randy Duckworth of the U.S. Dry Bean Council led the panel on dry beans. He began by offering a rundown of the major players.

North America: North American black bean plantings were down in 2016 on low grower interest. The overall supply is estimated at 269,755 MT, with U.S. new crop accounting for 190,703 MT, Canadian new crop for 30,108 MT and carryover stocks for 48,944 MT. This volume is down from last year’s overall supply of 308,432 MT.

Normally, the 2016 supply would be sufficient to meet the demands of the trade, but given the increase in demand that is expected to result from the recent crop losses in South America, U.S. and Canadian sellers may find themselves short on black beans this year, said Duckworth.

On cranberry beans, the overall supply in 2016 is estimated at 25,043 MT, with U.S. new crop accounting for 6,011 MT, Canadian new crop for 15,766 MT and carryover stocks for 3,266 MT. Although the 2016 supply estimate is considerably less than last year’s 35,993 MT, Duckworth notes that in 2015, El Niño brought drought conditions to both South Africa and Colombia, increasing demand from those countries. With El Niño fading, Duckworth believes the 2016 supply estimate of 25,043 MT will be enough to meet the demands of the trade.

On dark red kidney beans, Duckworth pegs North America’s 2016 supply at 75,691 MT, comprised of 53,021 MT of new crop from the U.S., 15,789 MT of new crop from Canada and 6,881 MT of carryover stocks. He believes the estimated supply will be able to meet the demands of the trade.

On great northern beans, North American plantings were down on weak demand and the industry continues to work on reducing old crop inventories. For 2016, the carryover is estimated at 13,611 MT. In the U.S., the new crop is estimated at 35,303 MT, while in Canada it is estimated at 16,016 MT, bringing the total North American supply of great northern beans to 64,930 MT, down from 95,614 MT last year.

Dark red kidney beans, Duckworth reported, have been one of the weaker bean classes in terms of sales this year. Predictably, the overall supply is expected to drop from 67,016 MT in 2015 to 59,142 MT in 2016, with U.S. new crop accounting for 40,068 MT of that amount, Canadian new crop accounting for 9,074 MT and carryover stocks accounting for 10,000 MT.

On navy beans, North American supplies are also expected to be down, from 350,686 MT in 2015 to an estimated 266,732 MT in 2016 (153,720 MT of U.S. new crop, 68,557 MT of Canadian new crop, and 44,455 MT of carryover stocks). Duckworth characterized this amount as reasonable.

On pinto beans, Duckworth reports that carryover heading into the 2016/17 crop year is the lowest it has been in several years thanks to strong demand from Mexico and the domestic market. Demand from those markets continues to be strong, as is demand from the Dominican Republic. Demand from Brazil may also pick up on crop losses there. For crop year 2016/17, North America’s pinto supply is estimated at 548,969 MT, with U.S. production accounting for 469,766 MT, Canadian production for 48,003 MT and carryover stocks for 31,200 MT. Duckworth believes the production volumes might actually turn out to be lower, as high soybean prices will likely see growers opt for this major commodity over dry beans.

On small red beans, Duckworth said the projected inventories “are the highest they have been in quite a while.” The overall supply for 2016/17 is estimated at 63,902 MT, comprised of 41,991 MT of U.S. new crop, 5,344 MT of Canadian new crop, and 16,567 MT of carryover stocks. “That’s probably one of the highest carryover numbers we’ve seen in a long time,” said Duckworth. He expects a decrease in 2017 small red bean plantings on low prices.

China: Next, Duckworth attempted to illuminate the murky situation in China. China’s recent decision to eliminate the support price on corn will likely see grower interest in that crop decline, but it is unclear what farmers will plant instead. For the most part, movement on dry beans in China has been slow, with growers sitting on stocks and waiting for prices to improve. There was some activity recently, though, in the form of shipments to Cuba and Brazil.

All of these factors make it difficult to calculate reliable estimates, but Duckworth took his best shot and offered the following numbers for China’s 2016 dry bean crop:

  • Dark red kidney beans: 40,000 MT
  • White beans: 40,000 MT
  • Light specked kidney beans: 150,000 MT
  • Black beans: 100,000 MT

On light speckled kidney beans, production is expected to be up from last year’s 120,000 MT because there was strong demand from India and South Africa in 2015. On black beans, Duckworth expressed reservations about the 100,000 MT estimate, clarifying that the figure represents the consensus reached by a number of sources he consulted. “It really depends on how the change in the corn policy affects beans,” he stressed, and added that he personally feels China’s black bean production will be closer to 60,000 MT.

During the Q&A portion that followed Duckworth’s presentation, Zikuan You of Hengsoy Agricultural Products provided further insights into the Chinese market. The elimination of the corn support price, she said, frees up significant tracts of land for dry bean production. As a result, she expects China will increase its dry bean production and become an important player in the global dry bean trade. You seconded Duckworth’s production estimates for light speckled kidney beans, black beans and white beans. She thought his dark red kidney bean estimate was high, however. She also mentioned that China’s 2016 purple speckled kidney bean crop is estimated at a record 30,000 MT to 40,000 MT.

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Photo: Slide by Randy Duckworth, U.S. Dry Bean Council

Argentina: Turning to Argentina next, Duckworth said dry bean planting there was well above historical levels for the second consecutive year. He estimated Argentina’s dry bean area this year at 400,000 hectares and provided the following production, carryover and overall supply estimates by bean class:

Estimated 2016 Dry Bean Supply Outlook for Argentina

BEAN CLASSS ESTIMATED 2016 PRODUCTION (MT) ESTIMATED CARRYOVER (MT) ESTIMATED 2016 TOTAL SUPPLY (MT)
Black 153,000 20,000 173,000
Alubia 107,100 15,000 122,100
Cranberry 13,770 500 14,270
Light red kidney 9,180 2,000 11,180
Dark red kidney 9,180 1,000 10,180
Mung 26,775 26,775
Other 1,912 1,912
 

Argentina’s mung bean production has increased significantly, noted Duckworth. On the black bean carryover, we warned of quality issues; rains hit the crop late last season, causing the beans to stain and wrinkle.

In fact, Duckworth continued, Argentina’s bean crop has suffered from harsh weather conditions in three of the past four years. This year, there was drought during planting, excessive moisture as the crop entered its flowering stage, and then frost in some areas. As a result, production is expected to drop off by 30%, leaving Argentina with an overall dry bean supply of just under 360,000 MT.  

Africa: Addressing the dry bean situation in Africa, Duckworth said the continent, especially its southern region, suffered from drought. South Africa, Zimbabwe, Malawi and other countries in the region were especially hit hard. Consequently, South African bean imports were up on reduced domestic production.

Central America: Turning to Central America, Duckworth reported that most of the countries of the region were spared the impacts of El Niño, with the exception of Guatemala and Colombia, both of which saw their domestic dry bean production affected by severe dry conditions.

In conclusion, Duckworth said Brazil’s drought significantly changed the global dry bean outlook, and as a result he foresees tight supplies in several bean classes this year.

“In the future, we are going to need to supply a lot more beans to feed people,” he said in closing.

Brazil: Marcelo Eduardo Lüders of Correpar then opened his presentation on the Brazilian market by pointing out that the country’s dry bean area has declined by 27% since the 2005/06 crop year; yields, however, have increased by 31%, more than compensating for the loss in area.

Last year, Brazil’s brown-eye bean exports totaled 122,600 MT, setting a new record. This year, Lüders estimates Brazil’s total dry bean production will total 2.847 million MT. This falls short of domestic consumption, estimated by the government at 3.355 million MT. The production shortfall is due to adverse weather.

Lüders offered the following 2016 production estimates by bean class:

  • Carioca beans: 2.09 million MT
  • Black beans: 387,000 MT
  • Brown-eye beans: 370,000 MT
The domestic market is already reacting to the production shortfall. This can be clearly seen in the carioca bean market. Carioca beans are the Brazilian consumer’s bean of choice, accounting for 67% of the nation’s total dry bean consumption. At the time of the convention, carioca beans were selling for US$ 1,300 per MT in the domestic market.

To bridge the supply-demand gap, Brazil’s buyers are seeking offers from Argentina and China. How many beans Brazil will import is impossible to tell given Brazil’s current political crisis; in the aftermath of the impeachment of President Dilma Rousseff, interest rates and unemployment have increased, reducing the purchasing power of Brazilian consumers.

Egypt: Mahmoud Afash of Alamir spoke about white bean production in Egypt. Egypt harvests two white bean crops a year. The first, the summer crop, is planted in late February to early March and harvested from May to June. This crop accounts for about 75% of the county’s total white bean production. The second, the winter crop, is planted from September to October and harvested in late December. In 2016, white bean plantings were down 25% for the summer crop. That decrease is expected to be partially offset by an anticipated 10% increase in yields.     

Turkey: Onur Ozdemir of AGT Foods-Arbel reported that a 30% to 40% reduction in Turkey’s dry bean plantings is expected this year. The hope, however, is that the loss in seeded area will be partially compensated by increased yields. Turkey’s primary export market is Iraq, which takes 15,000 MT to 20,000 MT of Turkey’s dry bean production per year.

Bean Market Corridors: Robin Buruchara of the Pan African Bean Research Alliance was invited to deliver a presentation on the bean market corridor framework for investment in Africa’s dry bean sector. This public-private initiative seeks to generate opportunities for small-holder farmers in Africa by connecting them with supermarkets, schools, hospitals, hotels, restaurants and other end-users. By identifying hubs and defining bean market corridors, this approach helps focus pulse-sector investments so that they may have the greatest possible impact.

Video: Global Beans Outlook

To access the presentations made at the 2016 Global Pulse Convention, login to the Global Pulse Confederation’s websiteAdditionally, videos of the Convention are available on the Global Pulse Confederation’s YouTube channel.

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Dario Bard, IFT Journalist