Grain Snippet: Lentil Prices Retreat Despite Rainfall Deficits
The lentil market remains in a strong inverse as local old crop supplies dwindle, contrasting with large global production forecasts for 25/26. Not all is rosy on the outlook, however, as the two primary lentil producing countries face a precariously low levels of moisture as the critical growing period creeps ever closer.
On the local pricing front, residual 24/25 season lentil bids have shaved off roughly $50/MT now that the final bulk vessel has departed SA’s shores. Meanwhile, Vic del. port bids have remained firm for vessels due for loading in July. Aside from existing commitments, the broader lentil market has been toying with the prospect of supply outpacing demand in 25/26. New crop forecasts to-date infer a record-large lentil production total amid the major exporters including expanded area in each Russia and Kazakhstan. Meanwhile, demand for lentils is anticipated to be lower y/y, most notably from India which has recently extended its duty-free period for yellow peas from 31st May 2025 to 31st March 2026. The extension of the relaxed import duties for yellow peas keeps the pressure on the wider pulse complex, particularly since they act as a far cheaper pulse substitute in India. China’s 100% duty on Canadian peas has resulted in a lot of peas redirected toward India in lieu which crowds-out a portion of the market for lentils. This outlook puts Aussie new crop lentil bids at a discount of nearly $100/MT.
Most notably, SA and Vic DCT (delivered container terminal) market appears to have significantly depressed the new crop lentil market over the last fortnight, despite near-zero grower selling liquidity on the back of drought concerns. Many key lentil-growing regions of both South Australia and Victoria have been experiencing their driest start to a year on record. A high frequency of slow-moving high pressure weather systems over SA and Vic through much of 2025 to-date has resulted in significant rainfall deficits. Naturally, this start to the year has put many growers on edge and incredibly reluctant to consider any new crop sales. Although it has come quite late, over the last week there has been a recent break that has offered up to 25mm of rain to coastal areas of SA, parts of the Mid-North SA, and the southern Vic Wimmera. Unfortunately, given the lack of subsoil moisture to-date, significantly more widespread rainfall will be needed before grower production optimism returns.
ABARES’ June forecast puts Australia’s national 25/26 lentil production at 1.49MMT, up 17% from the drought impacted 24/25 season. Of this total production, SA is anticipated to make up 46% and Vic 50%; it is consequently paramount for the lentil crop that rainfall across these two states improves over the coming months. Without a kind spring, meeting the ABARES lentil production forecast will be a challenge, despite another y/y increase in area for the crop.
It must be noted that there are increasing concerns over the Canadian lentil crop. Stats Canada have pegged new crop production near 2.3MMT which may now struggle to be realised. Whilst rainfall aided some of the southern Saskatchewan regions post-seeding, there is an increasing drought profile expanding from the province’s north-east which has put growers on-edge. Initial crop conditions for the region were reported at 79% good-to-excellent, 17 points lower than the same time last year.
Without significant rainfall over the coming months for each Australia and Canada, the lentil supply outlook could turn out to be far tighter than 25/26 lentil bids presently suggest.
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