Pulse weekly outlook: Wider price spreads likely with big chickpea crop ahead

CNS Canada — Canadian farmers planted their largest chickpea crop in more than a decade in 2018, with the bigger crop likely to lead to a wider price spread between larger- and smaller-calibre supplies.

Statistics Canada has placed chickpea acreage for 2018 at 468,900 acres, which would be well above the 160,000 acres planted in 2017 and the largest acreage base since 2002.

While total production is still to be determined, “I feel we have an average crop coming, which would be about 30 bushels per acre,” said Colin Young of Midwest Grain at Moose Jaw, Sask.

He described crop conditions across the chickpea-growing region as “a mixed bag,” with some fields in excellent shape and others dealing with localized weather events.

Some areas are also still on the dry side and in need of moisture.

“July is the last chance we have for a rain to increase the yield potential of the crop, then we hit the tipping point where rains will affect the quality,” said Young. Rains in August would put chickpeas at a higher probability of being frozen later in the fall, he added.

“If we could catch an inch or two of rain this week, the crop will be pretty massive.”

Even if those rains don’t hit, the large acres will still lead to a big chickpea crop, which will keep prices under pressure.

“In the last two years, if it was chickpea it was gold, it didn’t matter the calibre and it didn’t matter the grade,” said Young.

However, this year there will be a wider price spread between larger- and smaller-calibre chickpeas of about five to six cents/lb.

Eventual marketing decisions will depend on yields, quality and the individual farmer, with “everybody at this point sitting on their thumbs,” said Young.

Looking at the world market, potential supplies of nine-millimetre and larger chickpeas are relatively tight, while the supply of smaller-calibre chickpeas is high.

Smaller-calibre chickpeas will set the tone of the market, tethering the larger-calibre supplies.

“At some point people will buy the smaller caliber if they’re cheap enough,” said Young.

“Russia will come out and set the floor,” he said, noting the country typically has lower-quality and smaller-calibre chickpeas.

Canada’s small-calibres will get a $30-$50 per tonne premium over Russian exports — and nine-mm chickpeas and larger will get another $100 per tonne above that, he said.

— Phil Franz-Warkentin writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.