Glacier FarmMedia COVID-19 & the Farm

Declining lentil prices should level off, improve

Red lentils. (

CNS Canada — Red lentil growers, who have seen prices cut in half during the past year and a half, may finally be able to find solace in what some analysts call a brighter outlook for the remainder of 2017.

“I personally am optimistic that we will see higher prices. Some other people will dispute that, but I think India will continue to buy and that will make a big difference,” said Marlene Boersch of Mercantile Consulting Venture  in Winnipeg.

Red lentil prices have fallen from highs of 50 cents/lb. in December 2015 and January 2016, to recent returns of 23-25 cents/lb.

From a historical perspective, 23-25 cents isn’t that bad, said Chuck Penner of LeftField Commodity Research, but to growers who only recently have taken to growing lentils, it likely seems like a bitter pill.

“Prices are off these kinds of record highs we saw the year before, but you know it’s near the 23- to 25-cent level. Historically, that’s still not a bad price.”

Penner sees prices holding steady for the next several months, but the outlook depends largely on the weather.

Two main exporters, Canada and Australia, are both facing dry conditions. Red lentil crops in the Australian states of Victoria and South Australia are likely to be reduced, especially compared to last year’s massive harvest.

As well, dryness on Canada’s Prairies could rear up into a larger problem, but it remains to be seen how conditions are affecting yields.

Still, he said production issues in those areas should help lower some of the oversupply.

As well, he said, Indian farmers may choose to seed fewer lentils this November due to lower prices in that country.

“So that’s another reason for some optimism,” Penner said.

“For 2017-18, we’ll have some pretty good pricing opportunities all year long.”

For Boersch, prices through the remainder of the year will depend on how much India imports. Indian officials have said they will not need to import as much this year because of strong supplies, she said, but she sees a different story developing.

She said her data show that India’s domestic supply and imports have both increased for the last several years.

“They need a minimum of 25 million tonnes of pulses, plus. To me that still means a need to continue importing,” she said.

However, she said, importing countries may need to eat through stockpiles before ordering more. If major red lentil orders aren’t shipped out early in fall, it could have a psychological effect on farmers.

“If there are few early shipments, stocks can seem more burdensome,” she said.

She pointed to two key factors that will likely affect red lentil prices for the remainder of the year.

One is the state of the crops in the key exporting countries, Canada, Australia and Turkey. She said she is not convinced that the Canadian crop will be drastically lower, but the Australian lentil crop is likely to be lower than a year ago. Turkey, she said, has a reasonable lentil crop.

The second key factor is crop progress in India and that, so far, appears normal, with the monsoon season off to a good start.

Strong spring wheat prices may shift acres away from lentils next spring, she added.

“Seeing that we are quite stretched in terms of rotations in the lentil areas, I think farmers would welcome to expand wheat acres a little bit because it’s good for the rotations, especially if you see very good prices (for wheat),” she said.

Hard red spring wheat bids currently range from about $290 to $300 per tonne across most of Western Canada, according to data compiled by PDQ (Price and Data Quotes).

“I suspect that unless you have 23-plus (cents per pound) prices, people won’t even look at lentils,” she said.

— Terry Fries writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Follow CNS Canada at @CNSCanada on Twitter.

Tagged , , , , ,
COPA Medallion COPA finalist in 2012, 2014 and 2015.
©2021 AGCanada is a production of Glacier FarmMedia Limited Partnership. Any affiliated or third party content is the property of its respective owner and is used with permission.
Please refer to Copyright Page for details.
Click here to view our Website Terms of Use.