European self-sufficiency can be a reality - but it will take years/
Henk van Leeuwen on the complications of EU tariffs

Founded in 1980 by Gérard Serfati, French brokerage firm Cogeser specializes in the international trade of beans, lentils, and chickpeas in Northern Europe, Northern Africa, Turkey, Egypt, and India. 

Who are Coseger’s main customers?

We decided to work from exporters to importers and importers to exporters; we don’t source products directly from farmers. We also avoid dealing with the customers of our customers, and we tend to respect the supply chains. It's getting more and more difficult, of course, because there are attempts to break in and shorten the chain. So, I think that our added values are service and information and, of course, knowing the people with whom we trade: I think over so many years, we have developed quite a steady and safe contact list. As brokers, we have to be neutral and defend the interest of both the buyer and the seller. Our duty is to collect unbiased information and verify the same in order to allow a buyer and a seller to make their decisions in full knowledge of a particular market situation. At the same time, we work to harmonize exchanges between cultures and people with different mentalities and habits.

We have partnerships with an Australian company who are active mainly in the FOB market in Australia, and we have business partners for China and for South America. We manage the rest; there are three of us at Cogeser. My two associates, Florent and Hermann, joined the company in 2006 and 2007. 

Is there any particular region from which you source your products or does it depend on what the customer needs? 

I think it's mainly a matter of who wants what, and every year is different; maybe there are worse crops in one part of the world, and another part can take over. In general, the big flows are from Canada to the rest of the world, on lentils mainly. But, for example, Europe is a growing producer of chickpeas, and this is primarily in the last couple of years. I would say that, from the sourcing side, the main issue is to find the buyers; they are much more limited. But even on the seller side, there is a tendency of a narrowing-down of the number of actors. Markets are shrinking.

Has sourcing become more difficult recently given the logistics crisis and the short North American crop?

Yes and no. There's a certain flexibility; buyers—at least the importers—are beginning to understand the issues. They understand that there are drought or humidity issues so they are open to reviewing their quality demands a little bit. But yes, if there is no cargo available, then we have to find it from elsewhere. There are upcoming nations like Russia for green lentils and red lentils. Kazakhstan has also been more important in the last couple of years, although not so much this year. They’ve switched crops recently, for example, and are growing very few lentils now. But yes, Canada is really the world leader of the pulses markets in terms of supply.

With regards to supply from the USA, it’s been a different story. The USA normally exports many more beans into Europe but this has been significantly challenged by the import tax of 25%, which popped up all of a sudden. We’ve had an enormous number of challenges over the last two years, since the beginning of COVID really. To say the least: times are very challenging.

With the 25% import tariffs coming off, are people looking ahead to being able to source from the US again? 

Yes, for sure. I think the quality of US beans is definitely the best; they’re very well-adapted to the needs of the European markets, both in terms of being non-GMO and pesticide use. But, in the last couple of years, Europe has had to look for, for example, dark red kidney beans from other origins, and so Argentina has entered the market. They’re not the same level of quality as US beans but they’re a little less expensive so they’re an acceptable substitute.

With the EU’s upcoming ban on glyphosate taking effect this December, are you facing additional challenges sourcing products? 

In Europe today, everything we source has to be compliant with the European Union food safety rules in regards to MRLs (Maximum Residue Levels). That gives us a sort of natural selection of origins that can supply Europe and others that are unable to comply. Canada, the USA: they have no problems with that. Turkey is also a good source, but with African countries—Madagascar, for example—it's very difficult to get cargo that complies with the MRL regulations.

Europe decided to restrain the use of glyphosate in pulses from Canada and the USA maybe eight or nine years ago. But they put a much stricter limit on beans than for peas; peas could have ten times more glyphosate than beans. There was huge political activity from the USA and Canada with the EU to rectify that. But, for the rest of the world, I think that people who can control it, do. I think it comes down to money and educating farmers; poor farmers in Africa, for example, often lack training in how to use chemicals properly on their fields.

Within Europe though, we see very clearly that there is a net tendency toward the glyphosate-free production of pulses. So far, it looks like it is getting better every year. Maybe not this coming  season but maybe the year after I see European production becoming 80-90% glyphosate-free. From there, we will definitely see an attempt to make Europe self-sufficient in the use of pulses.

Do you see European self-sufficiency becoming a reality?

Yes, but it will take years. Chickpea production has been boosted—easily doubled—in the last three or four years. This has happened in France and Italy. And Russian chickpea production is also developing strongly.

There’s a definite drive at the consumer end for more local production. What effect is the trend having overall and how is it manifesting itself in France? 

Over the years, every important country has seen a reduction in its number of importers. For example, in France, today there are maybe four or five really big importers, whereas there were maybe double that number 30 years ago. The same thing is happening in the Netherlands and Germany too. The UK is a little different - it’s a fairly scattered market with many buyers who are willing to look around for alternative suppliers. But yes, I think the pattern is that there are far fewer actors on both sides. In France, there’s a real drive to boost chickpea, lentils - mostly green - and bean production.

Do you have a rough idea of what percentage of French demand is currently supplied by French production? 

For dark green lentils, for example, I would say that it’s about 100%. But with white beans, like alubias, which are very popular, production is still not enough to meet demand: they’re importing maybe 15,000-20,000 tons and the total consumption is a little less than 50,000 tons. We import Great Northern beans from the US and small white beans from Ethiopia, sometimes China, and a little from Ukraine. Alubia beans come from Argentina and a little from Egypt. In terms of red beans, virtually all of those are imported; French consumption is perhaps 6,000-7,000 tons. 

Do you see consumption and demand increasing in France with the increasing move toward a plant-based diet? 

I think so; there is a very slow upward tendency in the consumption of pulses. From memory, I think that the per capita consumption of pulses in France was 1.7kg per year in 2010, and that increased to 2.3kg per year in 2020. So it’s going up, but slowly. Elsewhere, it’s interesting to see the increasing number of organic pulses available, both from import and also from domestic production. Of the entire pulses market, I would say that perhaps 10% is organic but that is double what it was a year or two ago. 

Can you go into detail about how the shipping crisis has affected the European market? 

Rates have increased by more than ten times from Asia. And, besides the rates, it's not only that they move up the freight, but the rotations are decreasing. For example, there's regular business between Turkey and Egypt for red split lentils, etc and before the crisis, they would take three or four days to get there. Today, they take three weeks because they do the entire tour of the Mediterranean before they go to Egypt. It just totally turned upside down. People have to anticipate much, much longer delays for the cargo to arrive. It’s giving people big headaches. But I am very happy to see that buyers understand that it's like a force majeure. From the moment the seller hands the cargo over to the shipping line, it’s out of their hands. 

The interesting part is that the importers to whom we sell in Europe have to commit to the end-users, like the supermarket chains, to guarantee them a fixed price over at least six months, maybe one year. So they take a huge bet, and they can only do that by calculating a price that is incredibly high and that's going to be worked into the final price and the end user is going to pay a much higher price, too. It’s absolutely not sustainable but it is exciting and challenging. 

It's really interesting to see the prices in general. When I started, for example, Chinese lentils to France were at between $300-400 per ton. Today, after 30 years, it’s well over $1,000 per ton for the same lentil for the same use. Great Northern beans have doubled in price in the same timeframe. There’s definitely a tendency for everything to become much more expensive, and that's apart from the freight issue.

I should also say that I’m seeing the interference of the European Union and their rules getting more and more strict, and it’s getting more and more difficult to comply with those ongoing demands that, from time to time, are totally out of touch with reality. That’s also going to have an influence on pricing.