Global chickpea export supplies tighten

Global chickpea export supplies tighten

2021-06-15

A presentation on the world’s leading kabuli chickpea exporters by Mr. Navneet Singh Chhabra had broken a record. Total supplies for every exporter with the exception of Argentina are expected to be down in 2021-22 as compared to the previous year. It is due to the combination of lower carryover from the previous year’s crop and reduced production prospects for this year for most of the suppliers. He told the delegates attending the Global Pulse Confederation’s virtual Pulses 2.1 conference, that this is the golden statement of all this presentation.

Chhabra said, the short global supply situation is creating a firm price cost for new crop which is kabuli chickpeas. Demand will be down in 2020-21 due to the ongoing covid-19 restrictions and rationing caused by high prices. The reduction in supply will be even greater, which will create upward price movement in the market in the second half of 2021.

Russia is the world’s leading exporter of crop. The total supplies are forecasted at 284,000 tonnes, which is slightly down from last year because of a mere 20,000 tonnes of carryout from the 2020-21 crop.Exports are expected to fall by 17 % to 170,000 tonnesand there will be another small carryout at the end of 2021-22.

Mexico is the second biggest exporter, shipping out large amount of kabulis to markets around the world.Total supplies are forecasted at 165,000 tonnes and exports are expected to fall by 23% to 110,000 tonnes. International buyers seem to be waiting for Mexican prices to drop, but that isn’t going to happen, said Joel Valenzuela, a trader with JOVA.

There are four large exporters in Mexico that buy all the products from farmers at harvesting stage. They have the financial capital and facilities to store the product for up to two years.These companies incurred big losses for the past few years and will not be move from the current asking price of US$1,400 per tonne for Mexican product.In fact, he expects prices to rise in this fall to $1,600 per tonne due to the appearing shortage of the crop.

India’s supply is expected to boost up to 32% to 396,000 tonnes becauseof low carryout and very poor production prospects for all of India’s rabi (winter) season crops.Exports estimated to fall around 50,000 tonnesfrom 115,000 tonnes from each of the previous two years.The situation is so terrible that India is expected to import around 50,000 tonnes from Canada, Argentina and Turkey.Even with the supplies, India will end the year with 36,000 tonnes of kabulis, which is far away from the amount of 200,000 tonnes,which is needed to balance supply and demand of the following year.

According to Chhabra, Indian kabuli chickpeas are over-priced due to the shortage and the double freight costs caused by the crisis of shipping container.Argentina’s supplies are expected to grow slightly to 80,600 tonnes, but that’s only because volumes in 2020-21 were less than half of normal levels.Exports will fall to 45,000 tonnes from 56,000 tonnes last year and 165,000 tonnes the year before that.Turkey’s supplies are expected to fall 36 percent to 230,000 tonnes, creating a “very tight” situation.Chhabra is also forecasting around 108,000 tonnes of exports, which results in 20% decline.However, that would result in a negative carryout of -43,000 tonnes, which is nearly impossible.

He also said, either the exports would have to fall even further or the Turkish government will have to reduce its import duty and bring in product from other exporting countries.And that is all based on 190,000 tonnes of production, which is optimistic as given the dry conditions in eastern Turkey. It could be more likely around 150,000 tonnes.

Supplies in the United States are estimated around at 371,000 tonnes which results in 16% decline. An export program of 145,000 tonnes will result in 46,000 tonnes of carryout at the end of 2021-22. Chhabra said, “it means the U.S.A. will remain firm all year”.Canada’s supplies will dop to 22% to 386,000 tonnes because traders believe carryout from the previous year is much smaller than the government estimate of 350,000 tonnes.Canada is one market that will experience an increase in exports to 200,000 tonnes at 40% hike over the 2020-21 levels. He also said, this is because Canadian farmers have been holding stocks because of low prices and are now finally willing to sell.

Pakistan is the world’s biggest buyer of kabuli chickpeas. It has imported a whopping 383,000 tonnes of the crop in 2020.About half of that amount was Russian kabulis that were being used as a substitute for desis. However, Australia has a much bigger crop of desis, which are price-competitive with Russian kabulis this year, so that business might increase.The U.S. and Canada are expected to be major suppliers to Pakistan in the coming months.

Chhabra estimates the country will import another 100,000 tonnes over the next six to eight months.Algeria is another top buyer of the crop, as It imports mainly the large calibre chickpeas from India and Mexico.It purchased 65,000 tonnes in 2020 but may only buy 50,000 tonnes in 2021 because prices are too high.

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