CNS Canada — Ongoing trade disputes between the U.S. and several other countries might offer short-term opportunities for Canadian peas, but do the overall industry no good, according to the executive director of Saskatchewan Pulse Growers.
Carl Potts said ppeas could potentially find access to markets where the U.S. has been shut out, or in markets where U.S. goods face high tariffs.
For example, a threat of tariffs on U.S. soybeans destined for China could create an opportunity for peas to move there.
“But overall, these things just don’t bode well for the stability and predictability that farmers want and need from export markets,” he said.
The U.S. has slapped tariffs on goods from several regions including China, the European Union, Canada and Mexico. Many have been met with retaliatory tariffs on U.S. goods.
The U.S.-China trade skirmish has particularly garnered international attention as the world’s top two markets go head-to-head on escalating tariffs.
Some of those trade uncertainties can be offset by building domestic demand, Potts said.
“We have this duo situation. Certainly, a shadow is being cast as a result of the loss of our largest market, India. But on the other side, there are so many interesting, exciting things happening on the demand side, for peas and for other pulses as well.”
Several processors have plans for new plants on the Prairies, have starting construction or have already opened their doors for business, he said.
“We’re not there yet. Those plants are not all running, but within a couple of years, I think there’s the potential to have as much as 600,000 new, incremental tonnes of demand.”
Boosting local demand will play a critical role in stabilizing the industry, he said, because it is not subject to many of the same international influences and market vagaries that go hand-in-hand with international sales.
So far this year, Saskatchewan’s pea crop is shaping up well, he said, with many key growing areas receiving rainfall last week.
That’s a good early sign, for a crop facing an estimated 12 per cent decline in seeded acreage.
Statistics Canada in early July released estimates for total Canada-wide pea area at 3.602 million acres for 2018, down from 4.093 million in 2017.
Potts said the reduction, which hits yellow peas more than greens, was expected following the loss of access to markets in India, where 40 per cent of yellow peas were sold.
“With the lower prices associated with that, farmers were reacting to market signals and planting less.”
Last year, India slapped a 50 per cent tariff on pea imports, hoping to become more self-sufficient in food.
Potts said new-crop peas are selling for between $6 and $6.50 per bushel, down from $7-$8 a year ago, but he’s confident the short-term issues can be worked out.
India has made no signals that it will eliminate or reduce its tariffs soon, he added, so that likely leaves out any change by this harvest.
Eventually, India will need more peas, though it may not return to the volumes Canadian growers enjoyed two years ago. India is as dependent on weather and international market forces as other countries, he said.
“In the longer term, as we look a year out, we’re hopeful there’ll be some changes there.”
–Terry Fries writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.
Table: Pea area in Canada, in thousands of acres.
|Canada. .||Man. .||Sask. .||Alta.|
Source: Statistics Canada.