Grain Snippet: Lentils Consolidate
Lentil prices have recovered from post-harvest lows to approximately $700/MT on both an Adelaide and Melbourne basis, seemingly consolidating around this pricing point. This recovery has been supported by strong export performance and limited grower selling. A stronger Australian dollar is placing downward pressure on prices in local currency terms.
Export activity has been a key driver of market strength. Australia has shipped approximately 1MMT of lentils for the season to date (Oct-Feb). Monthly exports remain historically strong but are beginning to decline m/m, reflecting the typical front-loaded nature of shipments. February volumes reached 179kMT, down 36% from January, with India and Bangladesh the primary destinations. While full-season exports could reach 1.8–2.0MMT, this pace may exceed realistic global demand, particularly given competition from lower-priced Canadian supply and decent production from India’s domestic crop, estimated at 1.73-1.75MMT.
Global supply conditions remain a dominant bearish factor over the longer term, with burdensome anticipated global carry-out keeping a lid on how far the lentil market has been able to recover. Production across major exporting regions is high, with total global supply estimated to be up approximately 30% year-on-year. India’s harvest is now past the halfway mark and there haven’t been any surprises to-date. With its harvest progressing and domestic supplies entering the market, India’s reliance on imports is expected to decline.
Meanwhile, the conflict involving the US, Iran, and Israel has increased fuel, freight, and fertiliser costs, particularly affecting trade flows to the Middle East. This has embedded a temporary risk premium in lentil prices. However, the recent talk of negotiations has somewhat reduced immediate tensions, and markets are beginning to unwind some of this premium. At the same time, currency movements linked to these developments are influencing price competitiveness. The outcome for the Middle East remains uncertain at the time of writing, but higher food price inflation in the near term has contributed to price support for the wider pulse complex in the Indian Subcontinent. Notably, Turkey has restricted lentil exports and reduced import duties to manage domestic inflation.
Looking ahead to the 2026/27 season, production prospects are broadly favourable. Soil moisture conditions in Australia and Canada are generally strong, supporting planting intentions. While some climate risk exists—particularly the possibility of a drier Australian growing season linked to El Niño conditions—current indicators point toward another potentially large global crop. Area expansion to lentils is expected in some Australian cropping regions as growers feel the squeeze on margins even more this year. However, some regions have neared their limits on lentil area as part of their rotations in recent years.
Overall, the lentil market is balancing short-term support from strong exports and constrained grower selling against medium-term pressure from high global supply which is moderating overall demand and price expectations. With growers getting underway with seeding now in Australia, and Canada not far away, the 26/27 lentil crop will start to become a stronger focus for the market.
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