Russian market of peas and chickpeas - intermediate results of 2016/17 MY

Source

APK-Inform

4720

 

The price situation in the segments of peas and chickpea developed in different ways in 2016/17 MY. Nevertheless, most of market operators contend that chickpeas and peas are unconditionally perspective crops and each year attract the higher interest of producers and buyers. Hereinafter, we will talk about the results of the first half of the current season, and the prospects development of the specified segments.

 

Peas market

One of the key features of Russian peas market of 2016/17 MY is essential growth of harvest. According to APK-Inform news Agency, peas crop reached 2.2 mln tonnes that is 22% higher than the previous year. Such a result was promted both - by increase of sowing acreages which exceeded 1 mln ha in the current season (12% more than in 2015), and growth of average yield to 2.11 (1.86) t/ha.

 

Peas production in Russia

 

2014/15

2015/16

2016/17

Planted areas, `000 ha

960

942

1072

Yield, t/ha

1,68

1,86

2,11

Production, `000 tonnes

1503

1716

2200

Source hereinafter: APK-Inform Agency

 

Speaking about qualitative features of the pulse of 2016-harvest, most of market operators reported that the number of offers for food peas prevailed over fodder in the current season. Production conforming to requirements of state standard specification basically entered the market. During monitoring period some information about offers with raised humidity indicators arrived to Central Federal District however this factor didn’t affect significantly the pricing on the start of the season.

 

Sales strategy

Throughout 2016/17 MY agrarians offered small batches of peas rather actively and were ready to reduce prices for the purpose of urgent replenishment of current assets and release of storage facilities. At the same time, considering record-breaking prices (21`000-23`000 RUR/t CPT) in last season, many farmers preferred to constrain realization of large-capacity batches bean, expecting price increase by analogy with the past season.

 

Procurement strategy

Demand on the pulse was moderate. Representatives of the processing and export-oriented companies bought peas as required and, considering enough offers in the market decreased bid prices gradually. At the same time, most livestock entities informed that suspended purchases of peas and excluded it completely from the feed formulation due to unacceptably high prices for raw materials.

 

Price situation

It should be noted that 2016/17-season started with traditional reduction of prices. During the period from July till end of September bid prices for the crop in the European part of the country decreased by nearly 3`800-4`200 RUR/t and were fixed in the range of 13`000-16`500 RUR/t CPT. Along with it, first offers for beans began to come to the market at the end of August in Siberian Federal District. Respectively the most active price decrease in the specified district was observed during the period since the end of August until the start of October and varied within 5`800-6`200 RUR/t (to 10`000-120`00 RUR/t CPT-basis).

 

 

During October 2016 - January, 2017 the price situation didn't undergo essentially. Purchase prices within 13`000-16`000 RUR/t CPT were observed on the European part and 10`500-12`500 RUR/t CPT in the Siberian Federal District.

Now the bid/offer prices on the pulse in the majority of federal districts are fixed in an earlier established ranges. However in the Siberian Federal District the prices fall slightly due to low demand and were fixed within 10`000-12`000 RUR/t CPT in April, 2017 (down nearly 500 RUR/t compared with the previous month). And there won’t be essential price change in the nearest future.

Market participants forecast pro-increase in production of peas in 2017/18 MY. Some processors already announce the preliminary start prices for bean within 11`000-12`000 RUR/t CPT. In their opinion, the prices can decrease due to the expected increase of crop, as well as grow up in case of low qualitative marks of peas in the next season.

 

Chickpeas market

This segment is steadily characterized by reducing sowing areas in Russia. The current season didn't become an exception. Thus, in 2016 cultivated area under chickpeas constituted 374 thsd ha (-12% by 2015). In it’s turn, in 2016/17 MY production slightly increased and reached 320 thsd tonnes that is 9% higher than the previous season). The production growth was promted by increase of average yield up to 0.89 t/ha against 0.82 t/ha the previous year.

 

Chickpeas production in Russia

 

2014/15

2015/16

2016/17

Planted areas, `000 ha

461

427

374

Yield, t/ha

1,03

0,82

0,89

Production, `000 tonnes

454

290

320

Source hereinafter: APK-Inform Agency

 

Despite insignificant increase in production, the quality of 2016 chickpeas harvest were low due to adverse weather conditions, namely downpours during maturing. Let us remind, that chickpeas is highly drought-resistant, and excessive rainfall in any vegetative phase promotes the development of diseases and considerable deterioration of the quality.

 

Sales strategy

Considering the current situation, some amounts of beans not satisfying requirements of state standard specification came to the market. Agrarians preferred to constrain the sellers of high-quality chickpeas, expecting to realize it for more attractive prices.

 

Procurement strategy

Since start of a season, demand for the specified crop was very high. Most of the overworking and export-oriented companies experienced difficulties with getting raw materials amounts, necessary for work resulted in raising the bid prices. Besides, exporters made an essential rival to buyers on the domestic market that was caused by high interest in chickpeas of the Russian production. Such a situation gave support to internal prices.

 

Price situation

Increase of prices was the prevailing trend for the Russian chickpeas market in 2016/17 MY. Only on the start of the season the prices of chickpeas slightly fell (down 3`000-3`500 RUR/t) and fixed in the range of 42`000-49`000 RUR/t CPT. Contrary, since the end of October, the price situation began to develop in an upward trend.

Bid prices for grain during the period from November, 2016 till present grew by 10`000-12`000 RUR/t, having reached 51`000-58`000 and 53`000-60`000 RUR/t CPT in Volga and Southern Federal District, respectively. According to market analysts, the price range won't be adjusted essentially by the start of new season.

"Now we purchase chickpeas on 52`000 RUR/t. The number of offers remains low. Many agrarians are realizing chickpeas for seeds. There isn’t excessive demand right now and we don't expect on further prices increase. The season already comes to the end. And prospects for the new one look quite optimistic", – the processing plant representative of the Saratov region comments.

 

 

According to market participants, active price increase as well as high demand from the export-oriented companies can become prerequisites for the record production of beans in 2017/18 MY. Starting purchase prices for the crop are announced at the level of 42`000 RUR/t CPT.

 

Vera Sosna, APK-Inform Agency

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