Pulse weekly outlook: China/U.S. dispute could open window for peas

CNS Canada — As trade tariffs between China and the U.S. mount, so too does the potential for other countries to swoop in and plug the gap in whatever market may need filling.

While U.S. soybeans are the most significant of the crops included so far in the tit-for-tat battle of proposed tariffs, it seems apparent other crops could soon follow.

Carl Potts, executive director of the Saskatchewan Pulse Growers, said Canada’s pulse exporters will be ready for increased business it if comes.

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“As prices for soybean meal and other feed ingredients rise, then that could increase the price at which companies are willing to pay for peas,” he said.

China is currently the second biggest importer of Canadian peas, with an enhanced focus on yellow varieties.

Fifteen years ago the amount the Chinese took in was rather small, at around 15,000 tonnes a year, Potts said, but in the last few years that figure has grown to over a million.

“We think there’s significant opportunity for continued growth.”

China fractionates peas into fibre as well as starch for noodles, Potts said. As well, it has recently improved the process for drawing out protein.

“The global demand for plant protein is helping drive it,” he said.

With India already having placed penalties on Canadian peas, he said China may be looking to buy more anyway.

“China will be opportunistic, I think, and the prices might be more attractive to them,” he said.

According to the latest data from the Prairie Ag Hotwire; prices for Canadian yellow peas in Western Canada have fallen $1.75 per bushel over the past year. They are now locked in a range of $5.80-$7.

China won’t buy enough to supplant India as the No. 1 importer, Potts said, but the potential for larger sales is still there.

The increased attention comes at an opportune time, he said, as new production facilities across the Prairies will increase capacity significantly.

“We think that works out to about 600,000 tonnes of new incremental demand and processing capacity here on the Prairies. That’s not insignificant by any stretch.”

— Dave Sims writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.

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