A major importer of Canadian lentils has temporarily dropped its duty on the crop, but that probably won’t have a big impact on already sky-high Canadian prices, say industry officials.
Turkiye has announced it is dropping its 19.3 percent import duty on green lentils through June 30 and is also prohibiting export of the commodity.
“Right now, I don’t think it means much,” said David Nyznyk,a broker with Agri-Food Central Ltd. in Winnipeg.
The Canadian supply of large green lentils is “running on fumes,” which has pushed prices 55 percent higher than they were last year at this time.
He doubts much additional old crop business is going to occur with Turkiye.
“With (Turkish) interest rates being at 46 percent, they’re going to question the logic of buying at all-time high prices for Canadian green lentils,” said Nyznyk.
“They’re going to want to keep their cash available to buy the local production.”
That production will start to materialize at the beginning of July, which is likely around the same time Canadian supplies would arrive anyway.
Levon Sargsyan, director of grain brokerage with Johnston’s Grain, had similar thoughts on the subject.
“I’m not sure if there’s much left (in Canada) for old crop,” he said.
Sargsyan said red lentils are increasingly being substituted for greens in international markets due to the huge price spread between the two types of lentils.
He noted that Australia harvested another big crop of red lentils that are priced cheaper than Canada’s.
Those two factors could also be working against any further escalation of on-farm prices for green lentils in Canada.
Turkiye is both a prolific importer and exporter of red and green lentils.
It purchased 827,852 tonnes through the first 11 months of the 2023 calendar year, mainly from Canada, Kazakhstan and Russia, according to Stat Publishing. That is an 80 percent increase over the same period one year ago.
Many of those imported lentils are re-exported to nearby countries such as Iraq, Sudan and Algeria. Turkiye shipped out 505,745 tonnes of the crop between January and November 2023, a 19 percent increase.
Tuba Memis, import/export manager of Memisoglu, a Turkish pulse processing company, said red lentil production from the 2023 crop was good and there is enough to meet the country’s domestic demand until the new crop is harvested in July.
However, green lentil availability is low and demand is high, which is why the government took the steps it did.
Memis thinks there will be more Turkish demand than usual for green lentils in 2024. Those lentils will be supplied by Canada, the United States, Russia and Kazakhstan.
“But since green lentil prices are good this year, our farmers are also planning to plant more green lentils as they bought big quantities of seed,” she said.
Planting of the new crop is underway in the country.
Sargsyan said there is plenty of Canadian grower interest in new crop contracts for large green lentils. They were being offered at about 58 cents per pound as of Feb. 14, down a penny or two from the previous week.
Some growers have told him they are switching out of small green production and into large greens due to the price spread.
The problem is that seed growers are rapidly running out of seed for all types of green lentils, he said.
Source: ukragroconsult