Ask the Experts North America/
Canada Lentils Panel

SESSION SPONSOR

Analyst:
• Marlene Boersch, Mercantile Consulting Venture

Moderator:
• Carl Potts, Saskatchewan Pulse Growers

Panelist:
• Farhan Adam, Marina Commodities Inc.
• Quinton Stewart, Viterra
• Elyce Simpson Fraser, Simpson Seeds
• Jason Paskaruk, AGT Foods
• Loveraj Rai, ETG Commodities Inc.

During the GPC Ask the Experts North America: Canada Lentils session, Carl Potts led analyst Marlene Boersch of Mercantile Venture and panelists Farhan Adam of Marina Commodities, Elyce Simpson Fraser of Simpson Seeds, Quinton Stewart of Viterra, Jason Paskaruk of ATG and Loveraj Raj of ETG in a discussion about this year’s exceptional lentil harvest in Canada. 

Marlene Boersch began her presentation by commenting on the unusually low levels of soil moisture (less than 40%) in the main growing areas of the Prairies caused by the long period of heat and drought as of mid July. She then went on to discuss the yields, highlighting that it has been extraordinarily difficult to understand the situation. Boersch presented an estimate of 1,000 lbs/acre (drawing from a range between 817 and 1,051) which is down 33% from last year and 26% from the 5 year average.

Consequently, it seems, supplies are demonstrably affected. Even though seeded acres were slightly up (4.3 million acres), the 33% reduction in yield has brought supplies down about 32%. Exports are expected at 1.85 million tons, compared to 2.34 last year, and ending stocks are expected to be incredibly low, around 90 thousand tons. Breaking down the acreage by type, Ms. Boersch explained that of the 4.3 million acres, around 3 million were red, just under 1 million were large/medium greens, about 300 thousand were small green and around 21 thousand were other varieties. This means production by type is split at 71% (around 1.4 million MT) reds, 22% (around 430 thousand MT) large/medium greens, 7% (around 136 thousand MT) small reds and 0% (around 9 thousand) other varieties, making a total production number of around 1.95 million MT. Presenting some grade information from Saskatchewan, she commented that 82% of the lentils were of grade 2 quality or higher, which is the acceptable level for trading. 

Total export potential was estimated at 2.5 million MT, with a likely shortfall of 650 thousand MT. Ms. Boersch also highlighted that the stock:use ratio was below 10% for every lentil type. Canadian lentils will comprise around 37% of global production this year, compared to 43% last year. Production in both Türkiye and the US is also down this year, bringing total global production to around 5.4 million MT, down 18% from 6.7 million MT last year. Prices for grade 2 reds and greens have broken out of the price channel seen since January 2018 and are climbing towards the highs of 2016, which were $1,255/mt for reds and $1,65/mt for greens. The presentation concluded by predicting that prices will stay high this year, with some fluctuations, and that it will take around 2 years for stocks to be replenished comfortably. A final image showed soil moisture levels returning to normal but still some way away from being in optimum condition for seeding. 

In the Q&A section, panelists discussed who would buy less faced with the increased competition with speculation pointing to more price-sensitive markets such as the Indian subcontinent. The expectation was generally that importers will look for more local products and substitute cheaper crops. Regarding acreage for the upcoming year, canola, durum, wheat oat and flax were remarked to be at multi-year highs and will thus present hard competition.