Pulses

GVP $501 million est. Up 1.7% year-on-year.
Production of chickpeas expected to be 11% lower in 2021-22 year-on-year.
Faba bean exports increased 23% year-on-year to 55,192 tonnes.

Good growing conditions and strong prices for competing winter crop options such as wheat and canola, meant that the area sown to pulses in 2021-22 decreased by an estimated 14% year-on-year to total 437,000 hectares. Chickpea remained the dominant pulse crop with 280,000 hectares sown and an estimated 504,000 tonnes produced in 2021-22, although this level of production is estimated to be 11% lower year-on-year.²⁰¹ Exports remain dependent on several key markets such as Pakistan, Bangladesh, Nepal, and Egypt and United Arab Emirates in the Middle East, with food inflation and currency devaluation a substantial issue in a number of the South Asian markets. Constrained shipping capacity has also remained a major challenge for exporters. Demand for pulses remains strong and stocks are relatively low. Longer-term, plant-based proteins including for protein concentrates and isolates will increase demand for pulses along-side soybean and wheat which are the current dominant sources of plant-protein concentrates.

Production

Pulse crops competed with other favourably priced winter crop options such as wheat and canola, which contributed to a 14% decrease in the area sown to pulses to total 437,000 ha in 2021-22. Chickpea remained the dominant pulse crop with an estimated 280,000 hectares sown and an estimated 504,000 tonnes produced in 2021-22, a 11% decrease year-on-year.²⁰¹ Contributing to this decrease was a reduction in the area sown to chickpea in 2021-22, down 17% over 2020-21 production, while wet conditions resulted in delayed harvesting and quality downgrades.²³⁶

The next major pulse crop by quantity were lupins, totalling an estimated 122,000 tonnes, and faba beans, producing an estimated 100,000 tonnes in 2021-22, 8% and 15% lower respectively year-on-year.²⁰¹ Pulse crops are an important crop within winter crop rotations, with an estimated 7% of the total winter area cropped in 2021-22 under pulses. However, this remains well down on the 12% share reached in 2017-18 given the demand from India at that time for pulse imports.²⁰¹

NSW pulse production and share of winter cropping area²⁰¹

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Price

Producer prices for pulse crops in 2021-22 have been mixed with chickpea prices trending lower in the first part of 2022 while field pea prices (delivered Junee) were 3% lower in 2021-22 to $420/tonne compared to the previous year. In contrast field pea prices were 31% higher than 2020-21 average price (delivered Junee) and faba beans averaged $400/tonne (delivered Junee), a 15% increase year-on-year.²⁴⁵ Further, wet harvesting conditions for a portion of the chickpea crop in 2021-22 resulted in some quality downgrades, with some chickpea going to poultry and pig producers.²⁴²

Pulse prices (delivered Junee)²⁴⁵

Chickpeas
Field Peas
Lupins
Faba Beans

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Trade

Value of pulse exports by major destination³⁵

Bangladesh
Egypt
Pakistan
United Arab Emirates
Nepal
Other

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NSW exports of pulses totalled $188.2 million in 2021-22, a 16% decrease over the previous year. The decrease was driven by a decline in the volume of exports which were 20% lower year-on-year. The dominant pulse export from NSW was desi type chickpeas with Bangladesh and Pakistan the principal markets. The decrease in value of pulse exports was largely attributable to a substantial decline in chickpea exports to Pakistan. From a record export value in 2020-21 year of $117.6m, chickpea exports to Pakistan declined in value to total $46.4m in 2021-22. While the average export price per tonne of chickpeas to Pakistan was largely unchanged year-on-year, the volume decreased 61% to 65,928 tonnes in 2021-22. In contrast, chickpea exports to Bangladesh increased 26% to total 76,096 tonnes and were valued at $59.1m in 2021-22. The United Arab Emirates remained the third largest destination receiving 28,565 tonnes of chickpea, an increase of 18% year-on-year. Faba bean exports increased 23% year-on-year to total $30.4 million and 55,192 tonnes, with Egypt the main market, receiving 53,153 tonnes up from 42,481 tonnes in 2020-21.³⁵

Sustained high freight rates and container shortages has encouraged an increased number of bulk shipments of pulses which have typically been containerised, a trend that has continued over the last couple of years.²³⁷ Industry reports highlighted that freight costs for chickpeas to Pakistan for example had increased substantially with freight representing approximately half the costs of landed chickpeas. By contrast, freight represented 20-30% of landed costs in 2019.²⁴³

Macroeconomic Conditions

Relatively tight global supplies of grains broadly and trade disruptions caused by geopolitical and slowly recovering logistics following the pandemic, supported prices including those for most pulses.²⁴⁰

North American supplies of pulses continue to be impacted by the dry seasonal conditions experienced in 2020-2021, with low stocks from Canada, the largest pulse crop exporter, supporting prices.²⁴⁰ Although in the case of chickpeas, Canadian kabuli chickpeas provide limited competition with Australian desi production.²³³

Pulse export markets were volatile, with exports tending to be concentrated on a few major markets, particularly South Asian and Middle Eastern destinations. Food inflation globally including amongst the key markets for pulses in South Asia, was of concern.²³⁶ Bangladesh and Pakistan, who represent the major destination for chickpea exports, are facing substantially devalued currencies leading to increased domestic prices. Logistic and inflationary issues are also impacting Pakistani demand.²³⁹

Through 2021-22, India relaxed tariff levels on selected pulse crops for example, the Indian government suspended tariffs on lentils from Australia, amongst other countries, until September 2022 as a means of managing food inflation for domestic consumers.²⁴⁸ However any supply response by Australian farmers has been hindered given the short term nature of some of these tariff policy shifts.²⁴⁷

Input costs including fertiliser and agricultural chemicals and oil, increased throughout 2021-22, ²³⁵ while shipping costs and shipping availability remained challenging, with pulse crops competing with larger scale cereal industries for export infrastructure access.²⁴² While best practice crop rotations support pulses as part of sustainable cropping and pulses can have lower fertiliser requirements than other potential crops, producers are also considering alternate crops with cereals and canola recording high prices.²³⁹

Outlook

Demand for pulses remains positive and stocks are relatively low, with Canada the major pulse producer and exporter still recovering from recent widespread drought conditions. Both domestically and amongst competitors such as Canada, high prices for crops that are alternatives to pulses such as canola and cereals, within rotation constraints, are likely to limit the area sown to pulses in the near-term limiting risks of oversupply.²³⁶²³⁹ Longer term the Indian market will require structurally higher imports to address domestic production growth constraints requiring further trade policy adjustments.²³⁶ Further, global demand for plant-based proteins will come from the increasing use of protein concentrates and isolates which is beginning to influence demand for pulses, along-side the major sources remaining soybean and wheat.²⁴⁴²⁴⁶

Stronger Primary Industries Strategy

Horizon scanning for food safety threats using artificial intelligence

International Food supply chains are complex, with products and ingredients widely distributed across the globe. Contamination events during production or manufacture may not be communicated to international trading partners in a timely manner, with most alerts occurring in the source country prior to notifications further down the distribution chain. In recent years, outbreaks of foodborne illness have occurred in Australia weeks or months after the same or similar products were recalled overseas. Proactively scanning for potential incoming food safety threats is an important task, but is time and physically resource intensive due to the number of alerts generated from various source countries.

Strategic Outcome

Food Safety and Animal Welfare

To assist with effective monitoring of food safety threats NSW DPI (in partnership with the Australian Government Department of Agriculture, Fisheries and Forestry, and Food Standards Australia New Zealand) have developed a proof of concept tool using artificial intelligence (AI) to scan information sources for international food recalls and outbreaks. The tool is able to filter large volumes of information, extract key words (including product details, batch codes, the type of hazard) and display relevant summary data on a simple dashboard for further analysis and action. Currently, the tool is able to search and filter information from 15 different sources across 8 countries that routinely export food to Australia.

In the example shown below, the AI horizon scanning tool is able to search an international food safety bulletin and extract the key words related to a product recall of protein bars in the USA that have been contaminated with E. coli. This information can generate an alert to authorities in Australia in real time for review of the same or similar products that have recently been exported.

With sufficient data built up over time, the horizon scanning tool will be able to detect ‘spikes’ in a particular hazard or food that may be above expected background levels. These alerts can be a trigger for additional investigation of potential threats outside of a specific product coming into Australia.

Additional functionality is expected to be built into the AI tool in coming years, including the ability to scan local sources of information in NSW and Australia to look for food safety threats in domestically produced goods.