Grain Snippet: Large Lentil Exports Continue to Support Prices
Lentil prices in SA have strengthened post-harvest, with bulk export activity offering support for the market. With harvest pressures now behind us, the reduced grower selling liquidity has further supported prices. Since the start of the new year, bids have risen between $40-$50/MT; this comes despite the rise in the Aussie dollar which would normally hamper rallies in exported commodities.
The ABS have offered an update to Australian lentil exports for the season to-date; the data demonstrates a healthy start to the season with a record volume of exports ~640kMT between Oct-Dec. This export figure is roughly double the same period last year where supply was hampered due to drought. Of this total, India makes up 40% by destination and Bangladesh 34%. The volume of imports by India have surprised the market, particularly given the increase in lentil import duties and more comfortable levels of domestic and global supplies.
Large global lentil supplies dominated headlines in 25/26, with record production in Canada (at 3.36MMT) and Australia (at 1.8-1.9MMT), coupled with increased annual production in Russia and Kazakhstan. Lentil prices for the season reflect the large supply, and the cheapened relative value has helped to spur demand.
Canada’s lentil prices have not garnered the same price support as Australian lentils, resulting in a sharp increase in the price spread between the two major exporters. Canada’s lentils are becoming increasingly competitive in recent weeks as a result of this spread; indicating a potential cap to the recent local price rally.
The next major pulse crop the market is watching is the upcoming Indian Rabi harvest, which will offer further insights into India’s import appetite for the rest of the season.
Ahead of the Rabi crop harvest in India, there were some cold weather concerns in Jan through north-west outskirts of lentil cropping regions. This gave way to modest speculation over potential frost damage. Feb could see the opposite, with above-normal temperatures and below-normal rainfall which could subsequently lead to accelerated growth on lower moisture. Recent crop assessments indicate that whilst yields may be slightly impacted, it could be a bit of a ‘storm in a teacup’ – at least for the lentil cropping regions.
India’s lentil crop planting finished for most regions in early Jan, with the final planted area reported at 1.8 mil Ha, slightly above last season and nearly 20% above the 5-year average. Early estimates of India’s lentil production see the crop size at roughly 1.7MMT as a result of the increased area. Across the major pulses in India (lentils, pigeon peas and chickpeas), total production for 25/26 is looking very similar to last year.
Looking further ahead, lentil prices will be guided by the new season (26/27) outlook. Thus far, it is anticipated that Canadian growers will reduce the area planted to lentils this year, based on lower seasonal price indications and renewed benefits on other commodities (such as canola) now that China has lowered its trade barriers. For Australia, growers are likely to continue to chase the strong gross-margins that lentils normally provide. Unfortunately, the season’s weather outlook is far from ideal for key Aussie lentil regions. The uncertainty surrounding new crop supply is starting to lend market price support.
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