Market Update/
Mexico's Fall/Winter Crop 2021

CHICKPEAS

The seeding of chickpeas in Mexico has practically concluded and according to official figures, the seeded area is similar to what the chickpea panel projected on December 9th. It is possible that a greater seeded area may be reported in the official figures to be released January 31st

Above view contains an interactive dataset which can be only viewed on laptops.

From this table we can see that for the 2020/21 fall-winter season, we will have 134,000 MT available for sale; subtracting out seed and domestic consumption, we will have an exportable supply of approximately 122,000 MT for the period from March 2021 – February 2022. That compares to the five-year average of 144,000 MT of exports.

Another point to keep in mind is that over the past two years, the carry-in has been decreasing dramatically due to reductions in the seeded area. At the same time, the export levels have remained stable. This will gradually see carryover volumes dwindle to practically nil.

As a side note, when we followed up on the chickpea area in Sinaloa (approximately 13,000 ha.) via field visits and inspections, we confirmed that yields will be very low. We project no more than 500 kg/ha., and possibly even in the 200 – 300 kg/ha. range. This is due to the lack of rains during the crop development stage, which will also impact grain quality, especially in terms of size

YELLOW BEANS

Sinaloa’s yellow bean harvest has started and, as mentioned in the December 9th bean panel, we arrive at the start of the new marketing year with zero inventories and the seeded area is slightly higher than estimated by about 5,000 ha.

Since September 2020, the scarcity of yellow beans was felt in Mexico and prices rose to historic highs, around US $2,300 (46,000 MXP) wholesale.

A market empty and hungry for yellow beans saw some buyers anxious to replenish stocks and this incited growers in Sinaloa to cut and harvest their crop prematurely. Some growers did so in the face of irresistible offers from buyers of around US$ 2,100.00 per MT (42,000 MXP) for product direct from the combine to the truck.

The premature harvest resulted in quality issues, such as high moisture content, dirt adhered to the grain, small sizes, immature grains and lack of pigmentation. Nonetheless, given that, logically, the price could not remain at those levels throughout the harvest, some growers sped up their cutting in order to sell at the best possible price in the context of a downward market tendency.

Above view contains an interactive dataset which can be only viewed on laptops.

From the table we can see that production will be higher than the previous year. However, the biggest difference is that we are starting off with zero inventories compared to a carry-in of 15,000 MT in 2019/20. Under current conditions and projections, it is highly probable that we will again clear out inventories before we get to the 2022 harvest.

WEATHER

In recent weeks, weather conditions worried growers and markets, as rains and frost were forecast.

In the past few days, we had cold temperatures in the chickpea growing areas, but there was no significant damage that could affect the projections made so far.

Since Tuesday there have been light to moderate rains over much of Sinaloa and Sonora, but they did not cause considerable damage. The only crop that could be affected is the bean crop that had been cut but not combined; however, the bean crop found in that situation does not represent a significant part of the total seeded area. When it rains on cut beans, depending on the amount of

precipitation and the number of cloudy days that follows, there could be issues with cracked and spotted grains, adhered dirt residue and, in some cases, spoilt grains.

The rains appear to have been favorable from the point of view that the forecast discouraged the premature cutting and harvesting of the crop. However, we will have to wait and keep an eye out for possible impacts in the coming days.

Lastly, it is clear that we will again have a challenging year, similar to 2020, but with the advantage of the experience lived and a clearer idea of how to handle it. During 2021, we should keep several factors in mind in order to make the best possible decisions, such as the global economic context, the new lifestyles that have changed our purchasing and consumption habits, and others, some favorable to us, others not.

This article is based on information available to date. We still have a long road ahead of us and a series of factors that could change the situation.

OUTLOOK

Due to the rise in prices and the likelihood that the supply situation will be similar to last year’s, there is strong demand from several groups of buyers and even some that are not normally players in the dry bean industry.

The harvest is marked by very high prices initially that should drop quickly.

After the harvest, we will have stable prices for the following four to five months, with small ups and downs because of the scattered supply (a good amount of inventory in many hands).

In the second half of the year, the supply will consolidate (inventory in few hands) and prices will trend upward for the rest of the year.

It is still possible that the seeded area for beans may increase due to discrepancies in the information. There may also be increases in the chickpea area due to late seeding. Some minimal seeding has been reported in January.

This article reports the numbers to date. There remains a long road ahead and the weather will have the final say.

FELIPE SANDOVAL
TRADER
BEANS AND GRAINS INTERNATIONAL TRADERS
BEGRAIT
www.begrait.com
felipe_sandoval@begrait.com
Mob. + 52 687 174 8663