The impact of the modest improvement in the Indian outlook is that there’s less urgency for India to reopen its borders to lentil imports. Some imports are still expected, even with the 30% tariff, but the volumes won’t likely reach the totals that some had hoped for.
This has allowed Canadian lentil bids to flatten out again, but they haven’t really dropped off either. There is still some fresh export business being done to other destinations and that’s keeping the market supported. In fact, the pace of lentil exports actually increased in Jan-Feb, a time of year when volumes are normally lower. It also helps that farmers have set their targets a little higher and are less willing to sell than they were earlier this winter.
In general, we don’t expect to see a lot more upside in old-crop bids for either red or green lentils, although small 1-2 cent pops are likely, especially later in the marketing year when export sales need to be filled. But lentil supplies are simply too large to allow for a sustained rally.
The new-crop outlook depends on two main factors. The first is the planting intentions in western Canada. Most analysts are calling for a drop in acres, which would be helpful for prices. Our view is that seeded area will largely be unchanged, especially since old-crop bids moved up a few cents from last fall’s lows. New-crop bids are slightly below the spot market and may not attract a lot of sign-ups but still might be enough to keep farmers optimistic.
As always, prospects for Indian lentil imports will be the other main driver of the price outlook. In general, we expect India will buy more lentils next year than they did in 2018/19, but it won’t return to the boom year of 2016/17. If that’s the case, that should be enough to provide a little more support for lentil prices going into 2019/20.
Source : Alberta Pulse Growers