Esteban Davila on the US export market:/
“There’s no reason for lentil prices to drop until at least May or June”

Thank you for having us, Esteban. Without a doubt, the European market is a very important one for you. Can you tell me a little bit about the market conditions and the challenges you have been able to identify during the last year?

Yes, for us Europe is one of the most interesting markets because we seek quality markets instead of volume markets where quality plays a secondary role.

For example, in Spain there is always a demand for a high-quality product and that is an added value for us. It is a population that consumes pulses in all their presentations, both raw and canned as well as processed as flour and chickpea products. Also in Spain, we are working with Kasin, a variety of chickpeas that has high agricultural quality with which we can guarantee consistent product quality in the harvests. Our Kasin variety offers added value to the Spanish market and you can also see that certain varieties have been gaining ground over other varieties in different types of products.

How is grower sentiment?

They are holding, just like other countries. We're seeing very high prices and not a lot of offers in the market.  

Are you experiencing competition from Russia into Europe?

It is an issue that also has to do with quality. As I was saying, the Spanish market is educated in high quality. Not only that but Spain has a long-standing relationship with the US market; in that sense, Russian production has not yet had such a high impact there as in other markets. 

The competition will probably be felt in markets where qualities are more compatible and perhaps phytosanitary agreements matter less. In that sense, a lower-quality product would work very well in the South American and Central American markets. We’ve been hearing a little about Russia gaining ground in production and in markets in at least part of Europe but I think they still have developments to make to enter certain spaces. I think they are positioning themselves very well in Asia. 

How has the US harvest been this year and what are you expecting in terms of exports to South America?

We have finished harvesting lentils and are finishing harvesting chickpeas throughout Canada and the United States. Lentils have had a very significant price increase since harvest started until the last two or three weeks when we started to see the first shipments. Everything we see in the market can be sold and is selling very fast; we are expecting very high demand and rather low supply because of the lower yields. In the United States, we are expecting diverse quality. I mean, not all the crops will be number one, we expect to have a considerable number two crop. 

“Everything we see in the market can be sold and is selling very fast”

Tell us about some other pulse varieties you’re working with.

Shamrock is a green pea variety that works very well for food processors and canners, which is important for some markets. They’re wrinkled and they work very well for soaking, plus they have a sweet taste. At the moment Shamrocks don’t have much presence in Latin America so we’re looking to change that at Great Northern Ag, because it is something that can help a lot to this type of customer. We already introduced it into China and It had an excellent reception.

What can we expect from prices?

I expect to see low inventories. Prices, I think, will be very stable over what we are seeing now, although it depends on the location. I do not think there will be a significant drop. There is no reason for lentil prices to drop until at least May or June of next year. Production in the United States and Canada is already out so we already have a clear idea of what we are going to have. Demand is going to continue and we have high inflation, which means that prices may continue to rise. 

From this perspective, what can we expect going into 2024?

It is a little early to talk about the 2024 crop, however, now planting decisions are being made in Mexico and Argentina between November and January, and we are seeing problems with access to credit for farmers because grains are sometimes more interesting in prices and that has created a decrease in demand. We are already looking to contract for 2024 but it is still very difficult for us. We are also looking to hire for 2024 but it is still too early to know where the market will be at that point for the United States. We will have to wait and see what happens in November-December in Argentina and December-January in Mexico.