In-depth coverage of this year’s premier pulse industry event; part I focuses on dry peas and dry beans.

By Dario Bard

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This year, the Global Pulse Confederation and Pulse Canada decided to combine their respective annual conventions and co-host Pulses 2017, the largest pulse industry event ever held. The event took place in Vancouver, Canada, from July 11th to the 13th, and boasted 1,126 delegates from 50 countries.

The opening ceremony was emceed by Pulse Canada CEO Gordon Bacon (introduced to the tune of the Mission: Impossible theme in a humorous video skit) and featured remarks by a distinguished lineup of speakers, including Saskatchewan Pulse Growers Director Lee Moats, Canada’s Minister of Agriculture and Agri-Food Lawrence MacAulay (via pre-taped video message), Canadian Special Crops Association President Colin Topham, and Ethiopia’s Minister of Trade Dr. Bekele Bulado Bukana (who highlighted his country’s emergence as a significant pulse origin and made a pitch for Ethiopia to host a future Global Pulse Convention).

The keynote was delivered by Global Pulse Confederation (GPC) President Huseyin Arslan, who recapped the successes of the International Year of Pulses 2016 and outlined how the industry is building on that momentum; for instance, working with the FAO to declare February 10th as World Pulse Day and creating a pulse-specific trade contract with the help of GAFTA.

Arslan also spoke to the issues of food security and nutrition, and food waste and loss. Turning to production, he underscored the challenge facing the global agriculture sector: the need to produce as much food in the next four decades as has been produced in the past 10,000 years in order to feed the world’s exponentially increasing population.

The first day of the convention featured a diversity of sessions. Farm Credit Canada Vice-President and Chief Agricultural Economist J.P. Gervais provided a global economic outlook for pulses, which, based on world pulse production, economic growth rates and the currency situation in major markets, concluded that there is good reason for optimism in the agriculture sector. Richard Black of Quadrant D Consulting provided a look at market opportunities from the perspective of the food industry, and how pulses can help meet consumer demand for healthier food products. American Pulse Association CEO Tim McGreevy was joined on stage by Daria Lukie of Pulse Canada and Erika Simms of Maxwell PR for a presentation on delivering the industry’s key messages to consumers: pulses are nutritious and affordable, and contribute to sustainable agriculture. Chris Marinangeli of Pulse Canada gave a presentation on how regulation, policy and a communications strategy can create an environment that empowers consumers to adopt dietary changes; his presentation covered issues such as dietary guidelines and protein content claims. Lastly, to close out the first day, GPC President Arslan and Andrew Jacobs (also representing the GPC) were joined on stage by Jonathan Waters and Jaine Chisolm Caunt of GAFTA to introduce the GPC Pulses Contract #1 and discuss how it was developed as well as highlight some of its most important features, including a disciplinary mechanism for contract defaulters.

The most highly anticipated sessions, though, were the market outlooks for the various pulse crops. In Part I of IFT’s coverage of Pulses 2017, we report on the dry pea and the various dry bean market outlook sessions.

Dry Peas

The dry pea market outlook session was moderated by Vijay Iyengar and featured a presentation by Marlene Boersch of Mercantile Consulting Venture. Boersch began by noting an upward trend in dry pea production, trade and use from 2012 to 2017.

In terms of changes in production over the past five years, she noted that Canada’s dry pea production increased by 48% over that stretch of time, while in the U.S. it increased by 250% and in Russia it increased by 22%.

However, in 2017 Boersch expects to see an 11% decrease in worldwide dry pea production versus 2016 due to challenging weather conditions at various origins. She offered the following production numbers for the major dry pea growing countries:

Production Estimates for Major Dry Pea Growing Countries (in millions of MT)

COUNTRY 2016 2017
Canada 4.90 4.10
Russia 2.40 2.20
Ukraine 0.75 0.97
U.S. 0.56 0.46
India 1.00 0.80
France 0.46 0.50
Australia 0.42 0.33
Total 10.50 9.40
 

Switching to the demand side of the equation, Boersch made the following observations: India’s dry pea demand increased by 60% over the past five years; China’s dry pea demand increased by 40% over the same period, and now includes significant green pea as well as yellow pea volumes; and dry pea demand in Bangladesh is up 250%. Overall, from 2012 to 2016, global dry pea demand grew by 2.2 million MT, an unprecedented 58% increase.

On imports, however, Boersch expects the global trade to see a 5% decrease in 2017 due to limited supplies. She offered the following volume estimates for the major dry pea importing nations:

Estimated Import Volumes for Major Dry Pea Markets (in millions of MT)

COUNTRY 2016 2017
India 3.10 2.90
China 1.00 1.00
Bangladesh 0.50 0.45
Cuba 0.08 0.08
Myanmar 0.03 0.03
UAE 0.03 0.04
Philippines 0.02 0.02
Malaysia 0.03 0.03
Total 4.79 4.55
 

Although imports look to be down in 2017, Boersch noted that from 2013 to 2016, import demand from the major markets jumped from about 2.4 million MT to 4.6 million MT, an 88% increase.

In terms of exports, Boersch expects a decrease from last year due to limited availability. She provided the following figures for the major players:

Estimated Export Volumes by Major Origin (in millions of MT)

COUNTRY 2016 2017
Canada 4.00 3.30
Russia 0.70 0.65
Ukraine 0.20 0.20
U.S. 0.58 0.70
India 0.00 0.00
France 0.32 0.30
Australia 0.13 0.20
Total 5.93 5.35
 

Next, Boersch highlighted some new developments in the dry pea trade. On the demand side, she said that in additional to increased demand from the traditional markets, there are new market segments emerging, such as the pet food and fractionation industries. Further, in China, there is a potential for consumers to switch from animal protein to plant protein; should that occur, pea imports are likely to increase in that market.

The mic was then passed to the panel members. Rob Brealey of Nidera Australia remarked that, due to weather issues, Australia seems likely to harvest a bit less than the 330,000 MT Boersch estimated for 2017; additionally, he sees a possibility for increased pea demand from the domestic feed market, which could take a bite out of export availability.

Eric Fossay of Cargill Canada reported slow movement of Canadian dry peas into the Indian subcontinent at the moment due to buyers having healthy inventories and the availability of cheaper product out of the Black Sea region; he expects to see demand return in December/January. Fossay also said that, depending on how the weather affects the harvest, as much as 30% to 40% of Canada’s new crop may already be sold. Growers are in no hurry to sell their remaining stocks, he said, given that prices may rise as supplies tighten due to the impact of dry weather.

Antonina Skilarenko of the Community of Pulse Producers and Customers of Ukraine reported that dry pea production in the country has been growing by leaps and bounds, coming in at nearly 1 million MT this year. Next year, the expectation is that the Ukraine will displace Russia as the world’s second biggest dry pea producer.

Zhang Baosheng of Cofco-Shandong Vermicelli & Beans said that from January to May, China imported 467,000 MT of dry peas, which is about 100,000 MT more than it imported over the same period last year. At this pace, he saw a good chance for China’s dry pea imports to hit the 1.1 million MT mark this marketing year, which would be a record. Import demand is up in China, he said, because the country’s processing capacity has increased and because of low bulk shipping costs into Shandong Province.

Horacio Fragola of Farm Products gave an overview of Argentina’s dry pea production, noting that most of the crop is exported to neighboring countries. Historically, Argentina seeds around 100,000 to 130,000 hectares of mostly green peas, although in recent years more and more yellow peas are being grown. As global demand for peas increases, Argentina has ample arable land to expand its production, Fragola said.

Colored Beans

The colored bean panel was moderated by Cindy Brown of Chippewa Valley Bean and opened with an overview presentation by Randy Fairman of Fairman International Business Consulting.

Fairman began by looking at red kidney bean production, both dark and light, in the U.S., Canada, China and Argentina. Based on figures from 2006 to 2017, he calculated worldwide red kidney bean demand at more than 150,000 MT but less than 200,000 MT.

Moving on to speckled kidney beans, Fairman noted that China’s production has fallen off significantly from 350,000 MT in 2008 to about 50,000 MT in 2016; that might create opportunities for other origins to serve the markets that China had been supplying, namely India, Yemen, Pakistan and South Africa. He then presented a slide that included, in addition to the previously noted China light speckled bean production, U.S. and Canada pinto bean production, as well as cranberry bean production from the U.S., Canada, Argentina and China; lastly, he added in Brazil’s carioca bean production to show how it dwarfed all the others combined. This, he hinted, could mean that Brazil is a potential market for light speckled kidney, pinto and cranberry beans.

Figure 2
 

Turning to black beans, Fairman noted that Brazil’s demand drives the trade. If international prices are right, Brazil will import a lot of black beans. But if they are too high, Brazil, which produces three dry bean crops a year, will just grow its own. Fairman also noted that black bean production is trending upward in North America, but trending downward in China.

Following Fairman’s presentation, Brown engaged in discussion with each panel member.

She began by asking Marcelo Lüders of Correpar about Brazil’s import demand for black beans this year. Lüders responded that Brazil lost part of its black bean crop this year to excessive moisture, and will therefore import significant volumes from Argentina. But for now, despite quality issues, it is making do with its domestic production. Lüders then noted that Brazil consumes a total of 3.4 million MT of dry beans every year, with carioca beans representing the bulk of that amount. Brazil is the only country that grows and consumes carioca beans; therefore, when there is overproduction of this bean class, Brazil has nowhere to export its excess supplies, and when there is a short crop, prices skyrocket. Therefore, Lüders is promoting an initiative to diversify dry bean consumption in Brazil; he noted that in 2016, with bean prices at very high levels, consumers reacted positively to other classes, such as red kidney beans, speckled kidney beans, and alubias.

Brown then asked Rita Villafañe of Argencrops about Argentina’s 2017 dry bean crop. Villafañe began by acknowledging challenges with white mold this year, which specially impacted Argentina’s cranberry and red kidney bean crops. As a result, some beans manifested quality issues. Yields were also affected, although it was too early to know to what extent; at the time of the convention, Argentina’s dry bean harvest stood at about 50% to 60% due to rain delays.

Brown turned to Derwyn Hodgins of the Hensall District Co-op for a report on North American dry bean production. Hodgins provided a tour of the Co-op’s growing areas, noting excessive moisture in places like Ontario and Michigan, where yield expectations have been reduced, to fairer weather in Manitoba and other areas, where an average crop is expected.

Next, Brown asked David Liu about dry bean production in China. Liu responded that there are no official figures on dry bean production in China, and that he agreed with Fairman’s numbers, give or take 10%. Heavy rains caused crop damage in September and Liu emphasized that much will depend on the weather through the harvest season. On black beans, Liu described China as the backup to Argentina and the U.S., given that most of the demand is in South America and the Caribbean. China does enjoy steady trade into Cuba and Venezuela, which take about 20% to 30% of China’s black bean crop. Further, over recent years, China was worked through its excessive carryover and therefore Liu feels that, with production in 2017 estimated at 100,000 MT, China is presently in good shape to play its role as backup to Argentina and the U.S.

White Beans

The white bean panel was moderated by Onur Ozdemir of Arbel and, like the colored bean panel before it, opened with a presentation by Randy Fairman of Fairman International Business Consulting. Fairman began by looking at the three major white bean exporters: North America, which ships most of its white beans, mainly great northern and navy beans, to Europe, the Mid East, Africa, and Australia; Argentina, which ships most of its alubia beans to Europe, Africa and Asia; and China, which ships most of its white beans to Europe, Asia and Africa.

Historically, the total white bean trade has amounted to roughly 500,000 MT. Fairman divided this amount into two segments. Exports of the first segment, consisting of large- and mid-sized white beans, amounts to about 300,000 MT per year, with Argentina as the principal player. Exports of the second segment, consisting of navy and pea beans, amounts to roughly 200,000 MT per year, with the U.S. as the principal player.

Following Fairman’s presentation, Ozdemir addressed some questions to the panel. First, he asked Jorge Alberto Reynier of Primore if Argentina’s alubia bean production had recovered from the country’s 2013 drought disaster. Reynier responded that Argentina’s alubia production has returned to normal levels and, thanks to the hard work of the industry, seed genetics have been improving year after year. Historically, Argentina’s alubia bean exports have amounted to about 150,000 MT per year. The major destinations are Europe (45% of total exports), Algeria (22%), Turkey (12%) and Brazil (9%). For 2017, Reynier expects production to come in at 200,000 MT, and he estimates export availability at 150,000 MT. The quality of the beans is expected to be about the same as last year. About 35,000 MT have been forward contracted with prices ranging from US$ 1,050 to US$ 1,170 CFR to main Mediterranean ports. Harvest is presently underway; it is behind schedule, however, due to rain. About 15% of the crop had been harvested at the time of the convention.

Next Ozdemir turned to Wang Yuan of Jilin Yuanda Grains and inquired about the reasons behind the decline in China’s white bean exports. She responded that plantings have decreased as growers have switched to other commodities such as soybeans and rice in order to cash in on government incentives. In 2017, Yuan expects production to end up around 52,000 MT. Other factors that have contributed to the decline in exports is deteriorating seed quality and increased domestic demand. On the latter, Yuan estimated that 70% of production is consumed internally and that greater domestic demand has also led to increased white bean imports from Burma and North Korea. She cited export volumes of 6,900 MT in 2015 and 6,000 MT in 2016.

Ozdemir then asked Tewodros Yilma of Alpha Trading Partners about the decline in Ethiopia’s white bean exports, which were at 90,000 MT five years ago but fell to 40,000 MT last year. Yilma explained that practically all of Ethiopia’s white pea bean production is for export and therefore producers will only grow them if prices are attractive. Lately, prices have not enticed growers. On top of that, the growing area has been experiencing drought for the past two years, and that has cut production by about half.

Ozdemir then handed the mic to Emin Akkan of Ilta Agribusiness to discuss the potential for white bean production in the Black Sea region. For 2017, Akkan estimated navy bean plantings in the Ukraine at 30,000 hectares, all on rain-fed lands. He projected yields of 1.8 MT per hectare. This production is destined for the European market. In Turkey, he estimated white bean plantings this year at 100,000 hectares, all on irrigated lands. He projected yields of 2.3 MT per hectare. This production is likely destined for the domestic market, Akkan stated.

Lastly, Ozdemir asked Judd Keller of Kelley Bean about the impact of excessive moisture on white bean crops in Ontario and Michigan. Keller reported that in Michigan, crop losses were estimated at 15% to 20% of what had been planted at that time the storms hit; however, planting was still taking place and therefore additional beans were planted and several of the lots that had been washed out were replanted. In Ontario, losses were estimated at 5% to 10%. Keller estimated navy bean production at 150,000 MT in the U.S. and 76,000 MT in Canada. On great northern beans, he estimated U.S. production at 45,000 MT and Canada’s production at 22,000 MT.

During the Q&A, Ozdemir fielded a question about white bean production in Egypt. Egypt has two crops a year. It’s winter white bean crop came in at 40,000 MT and its summer crop, which was then being harvested, was estimated at 100,000 MT. Ozdemir pegged export availability for the summer crop at 90,000 MT, with caliber sizes ranging from 200 to 190.

Faba Beans

The faba bean panel was led by Atef Tadros of Teekay and Danny International. He began his presentation by discussing consumption in Egypt. Egypt’s population of 93 million consumes approximately 750,000 MT of faba beans every year. Because its domestic production is limited to 70,000 to 100,000 MT due to disease issues, competing crops and lower priced imports, Egypt relies on vast volumes of imports to make up the difference, making it the world’s top faba bean market. Its main suppliers are Australia, the United Kingdom and France. In recent years, other origins have increased their participation in the Egyptian faba bean market. These newcomers include Canada, Lithuania, Germany and Sweden, among others.

Following his presentation, Tadros turned to the panel, which included representatives from important faba bean exporting nations.

First, Metha Praphakorn of GrainCorp Australia spoke about faba bean production in Australia, Egypt’s biggest supplier. Praphakorn estimated carryover from 2016 at 110,000 MT and new crop export availability at 415,000 MT. The 2017 crop, however, is contending with drought conditions and production may end up below expectations, he warned.

Dan Holben of A. Poortman (on behalf of the British Edible Pulse Association) then discussed faba bean production in the United Kingdom, Egypt’s second biggest supplier. He estimated the United Kingdom’s 2016 faba bean crop at 580,000 to 590,000 MT, which is above the five-year average. The quality was generally good, but there were some beans that darkened early due to rain. Consequently, there were marketing issues with exports into Egypt and shipments fell off by about 40%; Holben estimated the United Kingdom’s faba bean export volume to Egypt at 180,000 MT. But an increase in domestic demand cleared out remaining inventories, and in fact the United Kingdom had to import several thousand metric tons of faba beans for feed use. For 2017, Holben believes plantings are down slightly, but barring a hot summer, yields should be decent. The crop should be harvested by the end of August. Asked about the possible impact of BREXIT, Holben noted that about 60% of farmer income in the United Kingdom comes from EU subsidies. Without those subsidies, he believes 90% of the country’s farming industry would collapse. The government, though, has agreed to maintain those subsidies through 2020, and Holben believes the United Kingdom will find a way to maintain them for the long-term.

The conversation then turned to France, with Julien Courseau of Soufflet Negoce (Soufflet Trading Group) addressing questions about the future of the country’s faba bean production. Courseau began by noting that France’s faba bean production has fallen off from 500,000 MT a decade ago to about 250,000 MT in recent years. This decrease is mainly due to farmer disappointment with the return on faba beans and national environmental regulations limiting pesticide use. Last year’s crop had quality issues due to rain damage, which made it difficult to sell into Egypt. Historically, France exported about 45% to 50% of its production to Egypt, but that volume has fallen to 10,000 to 30,000 MT; nowadays, a good part of France’s faba bean crop is destined for the feed market.

Kyle Luchia of AGT Foods closed the session with a few comments on Canada’s faba bean production, which, at a 130,000 MT, is small compared to the other countries represented on the panel. Traditionally, faba beans were grown in Canada as a feed crop, but production has increased dramatically since 2012, when it was a mere 7,000 MT. In 2017, because of soft prices last campaign, plantings have slipped and Luchia projects production to come in somewhere between 90,000 and 110,000 MT depending on the weather. But the potential for continued growth is there and, Luchia assured, Canada could step in should exports from the United Kingdom and France fall off.

Black Matpe, Pigeon Peas and Mung Beans

Marlene Boersch of Mercantile Consulting Venture returned to the stage as both the moderator for this panel as well as its opening presenter. She began by summarizing the typical output of the major producers of these three commodities.

As is made clear by the table below, India is the driver of markets for all three of these commodities. Looking at seeding this kharif season, Boersch estimated a 6% increase in black matpe plantings, but decreases of 25% and 70% for mung bean and pigeon pea plantings, respectively.

Annual Output by Major Producers

COMMODITY ORIGIN PRODUCTON
Black matpe
(avg. annual global production of 3.3 million MT)
India 1.8 to 2.8 million MT
Myanmar 600,000 MT
Thailand 100,000 MT
Pakistan 30,000 MT
Pigeon peas
(avg. annual global production of 3.8 to 4.9 million MT)
India 2.5 to 3.5 million MT
Myanmar 250,000 to 850,000 MT
Malawi 220,000 to 340,000 MT
Tanzania 170,000 to 250,000 MT
Kenya 85,000 to 275,000 MT
Mung beans
(avg. annual global production of 3.5 million MT)
India 2 million MT
Myanmar 350,000 MT
Thailand (not reported)
Indonesia (not reported)
China (not reported)
Mozambique (not reported)
 

Boersch then turned to exports. Several origins show great variability in export volumes from year to year, yet using the data available, Boersch summarized the annual volumes shipped by the major exporters as follows:

Annual Exports by Origin

COMMODITY ORIGIN EXPORTS
Black matpe Myanmar 520,000 MT
Thailand 100,000 MT
Pakistan 30,000 MT
Pigeon peas Myanmar 210,000 to 280,000 MT
Tanzania 200,000 MT
Mozambique 130,000 MT
Malawi (not reported)
Kenya (not reported)
Mung beans Australia 28,000 to 149,000 MT
Myanmar 5,000 to 20,000 MT
China 110,000 to 275,000 MT
Thailand 5,000 to 220,000 MT
Indonesia 5,000 to 40,000 MT
Mozambique 40,000 MT
 

In terms of the major importers, Boersch listed them for each commodity as follows:

Major Importers

COMMODITY IMPORTER
Black matpe
  • India
  • Pakistan
  • Malaysia
  • Thailand
  • UAE
Pigeon peas
  • India (520,000 to 650,000 MT per year)
Mung beans
  • India
    (350,000 to 675,000 MT per year)
 
  • China
    (15,000 to 40,000 MT per year)
 
  • Malaysia
  • Japan
  • Taiwan
  • Vietnam
  • Thailand
  • Indonesia
  • UAE
 

Taking a closer look at mung beans, Boersch indicated that India’s annual production (both rabi and kharif crops) varies greatly, ranging from 650,000 MT to last year’s output of more than 2 million MT. For the 2017/18 cycle, Boersch estimated India’s mung bean production at slightly more than 1.5 million MT. With such varied production, it is no surprise, then, that India’s import volumes also range widely from 330,000 MT to 675,000 MT; overall, however, India’s import volumes are trending upward. In terms of the major exporters, Myanmar is India’s major supplier, but from 2015 to 2016, its participation in the Indian market has slipped from 76% to 63% as Australia, Tanzania and Kenya have increased their participation.

Turning to black matpe, Boersch provided a long-term view of India’s production, which, from 2003 to the present, has ranged from 1.5 million to 3 million MT last year. For 2017/18, she sees production ending up around 1.7 million MT. The top exporter of black matpe is Myanmar, which typically exports more than 600,000 MT; Boersch projects 2017 exports at 640,000 MT.

With respect to pigeon peas, last year India had unusually large crops, with production coming in at 4.6 million MT. For 2017/18, Boersch projects production at 2.3 million MT, which would be a return to historical levels. On imports, in 2016 India received an unusually high volume of pigeon peas (648,138 MT); this year, she sees that volume returning to a more normal level (520,000 MT). In terms of exports, the trend is similar to that for mung beans, with Myanmar losing market share to Tanzania and Mozambique.

Following Boersch’s presentation, Lalit Bangar of Swiss Singapore Overseas Enterprises gave a report from Myanmar’s perspective. On pigeon peas, he noted that there was a significant decrease in prices from a year ago due to increased competition from other origins. On black matpe, he said that although Thailand is no longer a supplier, increased production in India is putting downward pressure on prices for that commodity as well. Lastly, on mung beans, Bangar reported that Myanmar’s exports also took a hit as supplies from African countries entered the market.

The mic was then passed to Sunil Patwari of Seasons Overseas to provide the view from Africa. He described the phenomenal growth in pigeon pea production that Africa has been experiencing and the downward pressure this new supply has exerted on international prices. Whereas Myanmar is currently selling pigeon peas at US$ 500, Africa is selling them for US$ 390. With supplies at burdensome levels, India, as the top consumer of pigeon peas, is reaping the rewards. On mung beans, Africa has also emerged as an important supplier, with annual production jumping from 40,000 to 50,000 MT a few years back to 120,000 MT this year. As with pigeon peas, this has also put downward pressure on prices, with Tanzania and Mozambique shipping product for US$ 570 to US$ 600 per MT. In closing, he said Africa is changing rapidly and is a region to watch.

G. Chandrashekhar, a global agribusiness and commodity sector specialist, then spoke about the Indian market. In 2016/17, India’s pulse production was at a record 22.4 million MT, and yet imports were also at an all-time high at 6.4 million MT, bringing India’s total supply to nearly 29 million MT. The market is therefore saturated and Chandrashekhar estimates it will take six to eight months to work through existing inventories. Looking ahead to 2017/18, he expects plantings to be down on weaker prices. For the upcoming harvest in September/October, the government of India’s production targets are as follows: 4.25 million MT for pigeon peas; 1.85 million MT for black matpe; and 1.65 million MT for mung beans. Chandrashekhar expressed skepticism that these production levels would be met; although he felt black matpe and mung bean production may come close to hitting these levels, in the case of pigeon pea production, he was sure it would fall shy of the target. If prices do change, he predicted they would trend upward rather than downward.

Photographs of the convention and videos of all the sessions, as well as their presentations, are available at Pulses2017.com. A delegate log-in is required.

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Dario Bard, IFT Journalist