Grain Snippet: Duties Hit Lentils Early
The lentil market has rebounded following lows seen in mid-March, with delivered SA markets returning to $890-900/MT and Vic Wimmera bids $850-$860/MT. The market was initially spurred by a sharp decline in the Aussie dollar in early April; yet despite the strong rebound in the Aussie, lentil prices have held up well. The firming price reflects seasonal post-Ramadan buying from the Indian subcontinent. Demand is no longer dominated by India following their solid domestic lentil harvest, coupled with hefty imports of lentils and several other key pulses prior to the country’s reimposition of import duties.
Grower selling of residual lentils recommenced as the market reapproached the $900/MT level, albeit on thin volume; most of the 24/25 crop is no longer in grower’s hands. The low availability of lentils has been further supportive for the market. Similarly, the dry start to 2025 for both SA and Vic has lent some price support for both old and new crop lentil prices. 25/26 lentil prices have lingered near $800/MT but the seasons’ start has resulted in low production confidence amid growers and subsequently negligible market liquidity.
The lentil market will be paying close attention to conditions over the next month in SA and Vic to gauge early production expectations. The last few years has seen planted area to lentils increase dramatically in response to high gross-margins and consecutive seasons of lofty prices. Subsequently, planted area to lentils is expected to expand once more for 25/26, however, yields may be curtailed once again by low soil moisture. The crop is yet to be planted, so there is still a lot of time for potential improvement; nevertheless, with large area, Australia is still looking at lentil production over 1MMT despite a potential low-yielding scenario. For lentils, this remains a relatively large supply, particularly in the context of global production which reached a record high in 24/25.
Canada is the world’s largest producer of lentils and competes with Aussie market share into the Indian subcontinent. The 24/25 season saw Canada’s production rebound after facing extreme dryness in each 21/22 and 23/24. For the new season, Canadian growers are faced with some tough planting choices amid trade barriers with both the US and China. Most notably, China has imposed a 100% duty on Canadian pea imports. A shift away from peas could result in a modest increase to lentil area, above the projections from Stats Canada that came from surveys prior to all the tariff implementations. The start to Canada’s season has been mostly amid decent soil moisture, with some dryness in southern Saskatchewan. Planting will be underway in the Canadian Prairies around the same time as in Australia.
2025/26 lentil yield forecasts for Australia and Canada will each be carefully watched by the market to see if the new season production continues to keep up with demand.
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