“I see us hitting one million MT in four years - or sooner”/
Tareq Awad on Russia’s 2023 Kabuli chickpea crop

For the past several years, Russia’s kabuli chickpea production has been trending upward by leaps and bounds, and this year’s crop continues the streak. In fact, according to Fruitimpex’s Tareq Awad, with the harvest all but wrapped up, it appears that the final production volume will exceed expectations. At Pulses 23, Russia’s kabuli chickpea crop was forecast at 475,000 MT, up 13% from 420,000 MT in 2022. But in Awad’s estimation, that figure is on the low end.

“I could see us ending up with a crop of 500,000 MT or even more,” he says.

At the time of our interview, Award reported that, with harvest progress at 95%, Russia’s farmers had already reaped 450,000 MT of kabuli chickpeas. That is double the production volume of three years ago. 

“In four years if not sooner, I see us hitting the one million mark,” Awad predicts.

In this wide-ranging interview, Award shared his insights not only on this year’s production but also on how export markets look for Russia’s kabuli chickpeas in 2023/24. 

GPC: Thank you, Tareq, for taking the time to speak with us today. To begin with, could you tell us how far along the kabuli chickpea harvest is and when you expect it to wrap up?

As of today (September 26), I would say around 95% of the kabuli chickpea crop has been harvested and, so far, we have a production volume of 450,00 MT. Harvest should wrap up in the first week of October.

GPC: What has the weather been like this growing season and how has it impacted the crop?

The weather has gotten warmer all around the world. Here in Russia, that has meant better conditions for crop production. This year, we had some late season rains that caused slight water damage to the crop but it will definitely be less than last year. 

GPC: How would you describe the quality of this year’s crop?

Fortunately, so far we are seeing good quality and caliber sizes. The caliber size distribution has been pretty normal. However, I should mention that we do have slightly more 5 mm chickpeas this year. Typically, 5 mm chickpeas make up 1-2% of the crop. This year, they make up 3-5% of the crop. Otherwise, 90% is of 6-7 mm and 5-6% is of 8-9 mm. 

With respect to color, we are getting the best golden color on Russian chickpeas. We had an increase in the growing area, and many of these new areas were previously seeded to peas and sunflower, so this year some lots will have more foreign matter.

Overall, the quality is better than last year. The volume of water-damaged chickpeas and the percent of water damage is less than it was last year. 

GPC: Why do you think quality is better than last year?

The international demand for Russian kabuli chickpeas has been increasing year after year. Because of this, we have seen more farmers switch to chickpeas from other crops, mainly grains such as wheat, corn, peas and sunflower. As more and more farmers seed kabuli chickpeas for the first time, their inexperience is reflected in, for instance, smaller caliber sizes.

GPC: At Pulses23, the harvested area was estimated at 395,000 hectares. Does that sound right to you? And also, what sort of yields are you seeing?

In Russia, we always get yields of 1.1 – 1.2 MT per hectare. In terms of the seeded area, it is more than 395,000 hectares this year. As I mentioned, a lot of farmers switched to chickpeas. This summer, I visited different growing regions, including Saratov, Samara and Barnaul. My colleagues there told me many farmers used to grow other crops but have now switched to chickpeas.

GPC: What is driving the interest in chickpeas?

First of all, chickpeas are easy to grow in Russia’s environment and climate. Second, it is very profitable for the farmer. A few years back, growers were selling chickpeas for 19-20 rubles/kg. Now they are selling for 50 rubles/kg. Granted, input costs such as seed have gone up, but even so kabuli chickpea farmers are clearing a good margin. This is not the case with other products, like lentils, wheat and yellow peas, for instance. And third, the demand for kabuli chickpeas keeps growing.

“A few years back, growers were selling chickpeas for 19-20 rubles/kg. Now they are selling for 50 rubles/kg.”

GPC: Back in May, at Pulses23, the production volume of Russia’s 2023 kabuli chickpea crop was estimated at 475,000 MT. With harvest nearly wrapped up, would you say we are on target to hit that amount?

Yes. I would say the crop is at least 475,000 MT. Given the increase in the area seeded to chickpeas, we may even have a bit more production than that. I could see us ending up with a crop of 500,000 MT or even more. 

GPC: One more question, Tareq, before we hand it over to Navneet. Last time we spoke, you mentioned domestic kabuli chickpea demand was increasing. What percentage of this year’s crop do you expect will be consumed locally and how much will be available for export?

Yes, we have seen an increase in domestic chickpea consumption. However, it is still minimal. Before, it was estimated at 1% of production. Now it is 2%. So it is increasing, but it will not affect exports at all. 

GG: Hello, Tareq. Navneet here. I’d like to begin by asking you about carry-in stocks. At Pulses23, we estimated a carry-in of 26,000 MT for 2023/24. Does that number still seem right to you and what is the quality of the carry-in chickpeas?

Last year, a small percentage of the kabuli chickpea crop had a bit of water damage. The industry expected that the carry-in would be 26,000 MT. But at the end of the season, in June and July, we saw strong demand, mainly from Turkey and Pakistan. As a result, we exported more than we expected and now the carry-in will be no more than 15,000 MT, made up mostly of 6-7 mm chickpeas with a high percentage of water damage.

GG: How do you see demand from the major export markets for Russian chickpeas in 2023/24? And if you could speak to how the instability in Pakistan might affect the trade.

We are seeing very strong demand. Even before harvest started, demand was very high and it has increased day after day. Pakistan is a very important market for kabuli chickpeas. Pakistan and Turkey are our top two markets. Sometimes Turkey is our top market, other times it is Pakistan. Of course, instability affects the market and pricing. This year, we noticed greater demand from Pakistan for SORTEX bagged quality chickpeas. This is something new that started this year. Of course, the currency in Pakistan is unstable and consequently demand fluctuates. But overall, demand from Pakistan has been strong for both bulk and SORTEX.  

The Turkish market, on the other hand, is slow at the moment. 

GG: Typically, when is the busiest time of year for Russia’s chickpea exports? And how much do you anticipate Russia will export in 2023/24?

Tareq Awad: The busy season starts in September and runs through December. The busiest months are October, November and December. We expect that, before the end of the calendar year, we will have 65% of the crop contracted. Last year, we contracted 55-60% by the end of the year. This year, it will be at least 65%. Already, we have 25-30% of the crop contracted. And if demand remains at similar levels, we can easily export 90% of production this marketing year.

“Already, we have 25-30% of the crop contracted. And if demand remains at similar levels, we can easily export 90% of production this marketing year.”

GG: How is the ongoing Russia-Ukraine war and subsequent sanctions impacting trade? Last time we spoke, you mentioned the logistics situation was improving.

Yes. There are new players in the logistics market offering competitive prices. These new logistics companies are mid-sized companies. They are not large international shippers. Russian exporters are already working with them, but with the increased demand, even with these new players, movement remains slow and we are facing delays.

The second problem caused by the war is the matter of payment. Most exporters are shifting from trading in U.S. dollars to local currencies. So trade is taking place in rubles or in the currency of the importing country. This is happening with UAE dirhams and the Chinese yuan, for instance. In Turkey, importers are paying in Russian rubles. And new markets are joining this trend. We expect Egypt will be doing so soon. Except for trade in Chinese yuan, which has been going on for years, this is a new development. We are not talking large volumes, but it is a start. It is a big help to the exporter.

GG: Can you give us a sense of current FOB prices for Russian chickpeas by caliber size and what pricing trends you are seeing in 2023/24?

This is a difficult question to answer right now because the government just recently announced it is imposing a 7% export tax effective October 1. Therefore, we have two options. Either exporters need to increase their prices or farmers need to reduce their margins. I think eventually the two sides will split this burden. Farmers will lower their selling price by 3-4% and exporters will increase their prices by 2-3%. The picture is unclear at the moment since this just happened and it was announced suddenly. It will take a week or two for a clearer picture to emerge. But for now, if we assume the exporter will absorb the full 7% tax, export prices for 6-7 mm chickpeas would be $750 per MT for bulk shipments and $800 per MT for SORTEX.

Also, I would like to mention that presently we are seeing a historically large price gap between the small caliber chickpeas and the large caliber chickpeas. Last year, 12 mm chickpeas from Mexico and India sold for $1,600-$1,700 per MT, and this year they are selling for $2,000 per MT. That compares to $800 per MT for Russian chickpeas last year and $750 per MT this year. So you can see that Russia is underpriced right now, and that is because of harvest pressure and the size of the crop. Prices will increase as we get closer to the end of the calendar year.