Australian chickpeas, lentils and potential supply chain issues/
6 insights with Mandala’s Umang Bagaria

Umang on…the chickpea crop

• “It’s looking better than ever. There’s a bit of uncertainty on rainfall so farmers are a little skeptical on selling early because of possible downgrades. There’s been some frost in some areas and the possibility of rain. Rain has been a good factor but now we don’t need anymore!”
• “Chickpeas are looking phenomenal. Every farmer and his dog has put chickpeas in! If you’ve been hearing 1.5 or 1.6 million tonnes, I wouldn’t be surprised if it’s 2 million plus. It's exceptionally good.” 

…supply chain issues

• “There will be truck issues because it's not just chickpeas that are great, every other crop is phenomenal: wheat, barley, chickpea, faba - you name it. They’re going to be super. Excessive rain could downgrade some crop quality but the quantity will still be there.” 
• “In the local market, there is a possibility of shortage of trucks and storage. There’s so much crop to be moved and bulk vessels are booked out for the next 12 months and they will suck in a lot of the tonnages meaning the local transport will be very busy this season.”
• “In lentils, South Australia and Victoria have been managing large volumes well for the last few years and farmers have had good values and invested in on-farm storage in a big way.” 
• “On the east coast, however, they haven’t seen such a big crop in a while so that’s where the worry is. They are trying to clear out the old crop, and that pressure is starting to build. We can see it will be a problem but we’re not sure how much.” 

…Australia’s lentil crop

• “In Australia in the last few years, we’ve gotten used to this size and quality of the lentil crop. The change in the quality has been the variety changing to smaller Nipper size, which has become more prevalent. That seems to be the future, the mid and bigger sizes are slowly disappearing.” 
• “There are some lentils growing in Western Australia (WA); all pulses have been increasing, actually. They were having a dry season a few months ago but now it has completely turned around. We can’t disregard WA as a growing part of the pulse production base in Australia.”
• “In the lentil area in Victoria, the crops are small and they’re late. They will be three weeks late to harvest over there but in general the quality is very good. Farmers are happy and it’s a good crop in the making. There’s no reason to complain but storage issues could be a problem.”

…a potential lentil glut

• “If lentils cross a certain num of tonnages with a very good crop in Canada and a decent one in Russia and other small markets, it could dampen the buyers spirits.”
• “Right now, it’s in a freefall. There could be a glut and not enough demand. There are many fundamental issues: some loss of confidence in the Pakistani market and political issues in Bangladesh. India has a lot of options to buy and a strong supply chain from Canada, they’re loading many vessels. Container issues to India and the subcontinent will continue and that won’t help.”

• “With some good rains in India and all the yellow pea that’s come in and taken that market and now with a massive crop out of Canada, it has corrected the market in the past weeks.”

…access to foreign reserves at destinations 

• “With inflation coming down and Covid now a more distant memory, there are not so many issues with forex. Management and control have been good at destinations.”

…consolidation in Australia’s pulses industry

• “It’s good and bad. Good because established global players are coming in and it will structure the market better and grow exports to destinations that smaller players don’t have access to.” 
• “On the other hand, it consolidates and reduces liquidity in the market and availability of products for smaller players.” 
• “Our response now is to diversify. We’re getting more into cereals, for example, to Asian markets and have diversified into Egypt and Turkey for lentils and faba beans.” 
• “Our biggest diversification to come will be going into asset building eg. a packing or storage plant.”