Pulse weekly outlook: Chickpea area to drop back to ‘normal’

Canadian chickpea acres are expected to return to more normal levels in 2019, after a sizeable jump in 2018.

However, while prices are off the highs that drove 2018 seeding intentions, they still could have some room to the upside over the next few months.

After seeding 442,900 acres of chickpeas in 2018, Canadian farmers are forecast to plant only 185,000 acres in 2019, according to estimates from Agriculture and Agri-Food Canada. While down on the year, that would still place the seeded area well above the previous 10-year average of about 150,000 acres.

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Prices are well off of their highs of a year ago, which is the major factor behind the projected acreage reduction, but there could still be room for some firmness from a marketing perspective heading into the spring and summer, said Colin Young of Midwest Grain Ltd. at Moose Jaw.

Chickpeas in storage need to be checked to prevent spoilage, but can be kept indefinitely in proper conditions. Young estimated any stocks that needed to be marketed were already sold a long time ago, with producers now content to hold out for better prices.

While current pricing for kabuli chickpeas in the 27-28 cents/lb. area is a far cry from some of the bids seen over the past year, they are up from their 20-cent lows and should pencil in as a viable cropping option, according to Young.

In addition, after the large 2018 crop “there is a lot of good quality seed that’s affordable and available,” he said.

Seed cost and availability will not be a barrier to chickpea production, but lower guaranteed prices from an insurance standpoint could sway some intentions away from the crop.

Last year, farmers were guaranteed 42 cents on any shortfall in production, which won’t be the case in 2019 given the current spot market, said Young.

Lentil prices also look to be on the rise, which will see some more interest there compared to chickpeas, according to Young.

From a marketing standpoint, “at this point, everything is still hinging on the situation in India,” he said.

While India is not traditionally a large importer of Canadian chickpeas, the country can be a competitor on the export market.

India typically will keep the smaller-calibre chickpeas for domestic consumption and export the larger caliber “at significantly discounted prices,” Young said.

If India has a production shortfall, it would be less likely to export cheaply — which supports world prices. India will be harvesting its chickpea crop over the next few months, and “the situation in India is weighing on people’s minds,” according to Young.

India is a large country with many different growing regions, but the general sentiment heading into the harvest is that dry weather will cut into chickpea production, he said.

Tightness of other pulses could also put the country in a position that it would need to import lentils, which would help set the stage for a repeal of the tariffs currently limiting Canadian exports.

“I’m cautiously optimistic that the markets will remain firm, or possibly appreciate.”

— Phil Franz-Warkentin writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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