Pulses
Cropping
Pulses
- Output $57m est. Down 20% yoy.
- Value of NSW pulse exports decline 7% to $53 million.
- India has reduced tariffs on lentil imports from 33% to 11%.
Pulse production was hampered by a poor season in 2019-20, with chickpea production hampered due to intense drought conditions across northern cropping regions. Southern growing regions managed to support modest increases in faba bean, field pea and lupin production, however, was still well below the 10-year moving average.
Producers that managed to strip a crop or had stored grain to market were supported by strong demand from the livestock sector. Lupins especially made strong gains and prices closed the year only just shy of parity with chickpeas. Meanwhile chickpea prices fluctuated on news or lack of subcontinent market fundamentals however, a strong and wet monsoon led to demand from Pakistan to blend Australian chickpeas for their Dhal market.
A larger crop forecast in 2020-21 will be welcomed by producers however, there will be interest in the subcontinent supply demand balance for the State’s major export of chickpeas. It is anticipated that new crop chickpea pricing could come under further pressure in 2020-21 unless India’s chickpea tariffs are relaxed moving forward.
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Production
Despite a very tough season in 2019-20, overall pulse crop production increased by 62% to 123 thousand tonnes on the back of lower planted hectares, more than offset by higher yields 10. The result indicated a general tone of risk aversion after disappointing drought impacted yields the year prior. When compared to the moving 5 year average, total pulse production declined by 76% 10.
Production impacts were generally aligned with the specific pulse crop and regional differentiators. Chickpeas are typically the mainstay of the pulse production in NSW, however due to the disproportional intensity of the drought in Northern NSW, chickpea production slumped to the lowest level in 25-years at just 20 thousand tonnes. Field peas and lupins, which are predominantly grown in southern NSW fared somewhat better, with combined production of 73 thousand tonnes and 59% of total pulse production, reflecting a marginal seasonal improvement in southern regions 10.
Pulse production
- Chickpeas
- Faba Beans
- Field peas
- Lentils
- Lupins
Source: ABARES (2020)
Pulse prices delivered Junee
- Chickpeas
- Field peas
- Lupins
- Indian chickpea tariffs instated 30% - 60%
Source: DPI (2020)
Price
Despite unfavourable seasonal conditions, the pulse market proved quite strong in 2019-20 for those that had stocks at hand or otherwise were able to strip grain during harvest.
Lupin prices in particular were buoyed by the stock feed market, with farmers looking for either high energy and/or good protein levels, both of which lupins provided at comparatively reasonable pricing. The divergence in lupin prices from field pea prices over 2019-20 was reflective of the significant drop in national lupin stocks relative to field peas, steady feed ration demand for both crops, dwindling feed grain stocks and the higher relative nutritional value of lupins.
Chickpea prices also proved quite resilient over the past few seasons, and even more so in light of the tariffs imposed by India in 2017 and 2018 which now stand at 60% for Desi chickpeas 90. Prices rallied around harvest time in 2019 as fierce competition surfaced from export packers looking to supply the Direct Container Trade (DCT) market. The majority of the production originated from Central Queensland, which typically supplies the bulk export trade however, due to strong DCT pricing and limited competition from Southern Queensland and Northern NSW growers, most chickpeas were sent in the DCT via Brisbane 89.
Trade
Exports of pulse crops from NSW declined by a modest 7% to $52.9 million in 2019-20, although understandably down on the peak export season of 2016-17 when $531.7 million of pulses were exported 94. Approximately 97% of the 2019-20 exports were chickpeas, with stronger pricing over the spring and summer months enticing old crop out of storage to supplement the limited new crop supply. Strong demand for chickpeas aided exports sales to Pakistan, United Arab Emirates and Bangladesh, the three largest markets respectively with a combined export value of $49.8 million, while Nepal was the only other significant market with $1.0 million in exports 94.
Nationally pulse exports held up relatively well with $1.17 billion of exports, up 32% year on year. For the first time lentils became the largest single contributor to pulse exports by value in 2019-20, making up approximately 42% of total exports 94. Lentils exports primarily originated from South Australia and Victoria 94.
Australian chickpea exports 2016-17 vs 2019-20
- Bangladesh
- Pakistan
- United Arab Emirates
- India
- Other
Source: GTA (2020)
Australian Chickpea Exports 2016-17 vs 2019-20
- Bangladesh
- Pakistan
- United Arab Emirates
- India
- Other
Source: GTA (2020)
Macroeconomic Conditions
A recent run of average or above average monsoon season rainfall meant India was able to support domestic demand for pulse crops internally, and in particular for chickpeas. India’s most recent monsoon delivered approximately 10% above the long-term average rainfall, which helped deliver a 14% increase in pulse production to 23.02 million tonnes 103. However, due to the heavy and extended nature of the monsoon, pulse production fell short of the India’s target of 26.3 million tonnes, with mung beans and lentils heavily affected 80.
Pleasingly for Australian producers, demand for chickpeas and other pulse crops surfaced from Bangladesh, Pakistan and the United Arab Emirates. Pakistan’s chickpea production reportedly increased however, a range of seasonal factors led to huge variations in quality and as a result Australian chickpeas were used to blend with local product for the Dhal market 92.
Outlook
With very timely rainfall at the beginning of the 2019-20 winter cropping season, it is currently forecast that NSW pulse production in 2020-21 will increase by 411% to 630 thousand tonnes, with 352 thousand tonnes of chickpeas alone 9. Follow up rain will be required, particularly in the Northern areas of the state to finish the chickpea and faba bean crops.
The 2020 Indian monsoon season has delivered some varied rainfall so far however, mostly it appears to be on track or above average 81. While moisture is unlikely to be a limiting factor this upcoming season, flooding or extended conditions may hamper production. For now, it is a waiting game to see how far India’s production goes to meeting government targets and whether the Indian government reduces punitive tariffs to sure up supply.
India’s lentil production came in significantly lower than government targets, leading to food price inflation. The Indian government has subsequently reduced the tariffs on Lentil imports from 33% down to 11%, which will assist any lentils still in storage and depending on how long tariffs stay low, may encourage some further lentil plantings in 2021 150.
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