Pakistan’s pulses face a firmer outlook/
Chickpea supplies tighten as imports, prices and weather risks shape trade

Great to have you back to chat with the Pulse Pod again. Let's start with chickpeas — where does Pakistan's supply position stand right now?

Pakistan has to import around close to 350-400 KMT annually. Our production is close to 300-350 KMT while the consumption requirement is more than 700 KMT. Over the past six or seven months, a lot of cargo has been imported, but we still need volume till the November new crop in Australia — we need between 130-140 KMT at least, out of which we've covered around 60 KMT. One vessel was done three days ago at $636/t, but Pakistan still needs around 60-70 KMT more between now and November. 

Tanzania, we feel, will go to India because of the context, and Russian supply is coming in small quantities, but there are logistics and war-related issues there. So Australia will be our main supplier.

And where are prices sitting at the moment?

Over the past week Pakistan was buying at $600/t; yesterday, trades happened at $670/t from Australia and $685/t from Tanzania. The market has shot up locally from 172 rupees per kilogram to 192 rupees per kilogram in a span of 10 days. We are anticipating this market will rise further because there aren't many offers coming from Australia — farmers are holding back, anticipating the crop to be lower next year. 

New crop is usually offered $50-60/t lower than spot prices. As of today, it's being offered $15-20/t higher than spot, which is a sign there's a definite sentiment that the new crop will be lower in Australia and India. We're also seeing Indian demand coming in. Local prices in Pakistan are moving upward, stocks aren't that great, and due to logistical delays, containers will also be delayed. Only one bulk vessel of around 24 KMT has been done, which will arrive in September. So right now there's a gap in the market. At the end of the day, Pakistan is bullish on chickpeas.

Moving on to mung beans — how does that market look by comparison?

Green mung bean production this year is approximately 175 KMT, and our consumption is 225 KMT — so we need around 50 KMT, coming in small volumes from Kenya, Tanzania and Burma. Mung beans, relatively, we're well covered; local prices are also stable, so I don't think there's much excitement there in terms of trade.

What about lentils?

Our production is only like 10-15 KMT, and our consumption is around 160 KMT — though personally I feel it's closer to 190 KMT, because lentil consumption has gone up over the years. Two vessels came in two months back, and now we have two Crimson vessels booked and one Nipper vessel booked, all to come over the next two to three months. With the huge crop in Australia and a large Canadian crop, we don't see lentil prices jumping — there's a temporary gap until those vessels arrive, so current spot prices are higher. Spot is around $580/t, but imports are being done around $550/t for Nipper and $525/t for Crimson.

And black matpe?

Burma is our main source for black matpe as we only produce about 5 KMT and we need to cover a consumption of around 90 KMT. With Indians ramping up their prices, we have to follow the trend. I think prices for black matpe will remain stable or go up because we still foresee Indian demand coming in.

You touched on chickpeas earlier — how do Kabuli chickpeas compare to the desi market?

Our production is only 15 KMT, consumption is 250 KMT — this includes origins from the USA, Russia, Argentina, and others, with Russia being a major one, plus mixed Kabulis from Canada. Over the past month a lot of containers have come in from Russia and a lot from Canada, so the local market is depressed because supply is much more than monthly consumption of around 20 KMT. Stocks are at around 50-60 KMT in the market. Kabuli is a bit slow, but we feel it will follow the desi chickpea trend, just not as fast as traders would like.

What's driving the yellow pea market at the moment?

We have zero production. Consumption used to be 100 KMT; it's jumped to 200 KMT because a lot of demand is being substituted away from chickpeas. We have one vessel coming in — 24 KMT from Canada in October — and with the Black Sea disturbed, some containers are coming in but with delays.

There is another vessel coming with 10 KMT. We still feel there's demand for around 80-100 KMT, maybe 120 KMT from now through to December. There's talk of India potentially removing duty on yellow peas, so everyone is scrambling to buy containers at the moment; prices went as low as 90 rupees per kg (around $300/t or less) but now they've gone up to 106 rupees per kg, gradually rising. Once the vessels come in, prices should stabilize or come down, but with Ramadan demand also there, longer-term yellow pea prices look stable or moving higher.

And finally, kidney beans?

Our production is 3 KMT, rough consumption is 50-60 KMT, coming mostly from Argentina, Brazil, Kenya, Ethiopia and other African countries. Prices are sustained, and demand will pick up as winter months approach.

Looking at the wider picture for pulses, what's your overall read on the Pakistani market right now?

Overall, across all the pulses in Pakistan, I think prices are stable to firmer. Most we anticipate will go up, some will remain stable or slightly softer once supply comes through. Imports should start to pick up around November time in anticipation of Ramadan demand in February.

Generally trade is in good shape, except where stocks are high. People who are stocked up are making money. Interesting times ahead.

What effect, if any, has El Niño had on the current crops being grown — and is there bracing for an impact on the rabi crop later in the year?

We're in the same weather belt as India, so right now Pakistan isn't fully prepared for El Niño — our meteorological department hasn't taken any steps in response to it — but we feel there will definitely be an effect on the new crops, especially chickpeas. We're already seeing impacts on wheat: Pakistan is going to import around 3 MMT, with 1 MMT already announced. 

Other than sugarcane, we're seeing impacts on cotton and wheat, so definitely pulses will also see an impact. But it's too early to call it, because unfortunately we have no stats, no forecasting, unlike India or other countries. That said, I personally think the next crop will see the impact of El Niño —  I'm confident it will follow the Indian trend. I feel there will be a downside for chickpeas as well as mung, even though some are predicting that won't be the case. 

Can you talk about how the current crop is going in terms of rainfall — how important has good or bad rainfall been?

Rainfall has been less than it should be, and in some areas there's been too much, which isn't required either — we've had hailstorms. So yes, crops are facing an issue, and as I said, I see an impact coming for both mung beans and chickpeas. That said, there's still time — hopefully more favourable rains will come, as we’ve seen in India, even if they’re delayed.

I noticed China has increased its demand for chickpeas massively this year — has that had repercussions for prices and the market, including for Pakistan?

When China or India come in, prices are bound to go up. However, world production is very big this cycle for kabulis, especially in Canada and the USA, so I think prices have remained relatively stable. 

China hasn't really affected us directly. Only when China was buying yellow peas heavily, mainly via Canada, did we see a real effect. It's really the smaller Australian crop that's having the bigger effect — overall prices are up, and we've had to increase our prices, but other than that we haven't had any major issues.