Good prospects for 2023
As reported by the experts at Chelmer Foods with reference to the Global Pulse Confederation (GPC), estimates for the global lentil crop this year are 7.12 million mt. This would be the second highest on record, only 2017 saw more lentils harvested at 7.3 million mt, and would represent a 6.6% increase over 2022. The increase is mainly due to high production in India and Canada, while Australia’s is expected to decline after a record crop in 2022. However, Chelmer Foods stresses that under optimal conditions - this includes minimal effects from the weather phenomenon El Niño - a new record could nevertheless be achieved here as well.
Prices receive little support
In 2021, the North American growing regions in particular were hit by a severe drought and the global crop was only 5.8 million mt. Although consumption also declined, there was a deficit of 300,000 mt. Experts now forecast that the large production in 2023 will also increase consumption: According to their estimates, it will be 6.9 million mt this year. Due to payment issues in South Asian countries, AgPulse Analytica expects the trade volume for lentils in 2023 to be 4.5 million mt. This would be significantly less than the 5.2 million mt traded in 2020, but would represent an increase from the 4.3 million mt traded in 2022. With larger supplies in origin countries, high upcoming production volumes and relatively low demand from South Asia, lentil prices are unlikely to receive much support, Chelmer Foods states. It could be a different story if El Niño affects the Australian crop or adverse weather conditions in India cause crop damage.
India surprises the market
A recent lentil tender issued by India has taken market players by surprise, signalling that the country wants to increase its stocks before the new crop arrives. The tender is putting pressure on dwindling stocks while farmers are busy sowing. It is estimated that they still have 60,000-80,000 mt of old crop lentils in their warehouses. Considering that farmers usually keep back the last 5-10% for their own use, reaching a stock level below 10% would mean a sell-out scenario. Should India continue buying at such a high level, it would lead to even more volatility in the lentil market, Chelmer Foods experts are certain.
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