Food Outlook No.5 - December 2002 p.9

Pulses

Pulse production forecast to increase in 2002

FAO's latest forecast for global pulse production in 2002 stands at 54.4 million tonnes, 1.4 million tonnes less than the preliminary forecast in May, but still 2 million tonnes up from the previous year. Output is expected to increase by 12 percent in the developing countries, but a decrease of 16 percent is forecast for the developed countries, mostly due to poorer crop conditions in Australia and Canada.

World Pulse Production

Source : FAO

In Asia, pulse production in 2002 is forecast at 27.1 million tonnes, 16 percent up from 2001. The bulk of the increase is accounted for by India. Total pulse production in India, the world's largest producer, is now forecast at about 14 million tonnes, almost 3 million tonnes above last year's drought-reduced output. The recovery is mostly in the chickpea and dry pea crops. The Rabi (spring) pulse crop is estimated at 8.5 million tonnes, while the Kharif (autumn) crop is forecast to fall short of the Government's target of 6 million tonnes, due to drought. China's pulse production is likely to expand further this year due to area expansion and in response to attractive prices. Production in Myanmar, which consists mainly of beans, is forecast at a record level of over 2.5 million tonnes, due to a larger area and favourable weather. The growth in Myanmar's pulse production continues to be driven by export demand. In Thailand, production is expected to rise from 2001, as relatively high prices last year encouraged more pulse planting in 2002. Better weather and moisture conditions are expected to boost pulse production in the Islamic Republic of Iran, Syria and Turkey, where their output consists mainly of chickpeas and lentils. By contrast, in Pakistan, the chickpea crop is expected to remain below average due to insufficient rainfall. Tajikistan's dry bean production is also likely to shrink due to drought, but also because of difficulties in obtaining seeds.

In Africa, the overall regional pulse production in 2002 is expected to remain unchanged from the previous year, despite several changes expected at the individual country level. In Eritrea, a large reduction in area, due mainly to the scarcity of seeds, is expected to negatively affect production in 2002. Poor seed quality and insufficient moisture may also reduce yields. Dry bean production is expected to drop in Burundi, where seed shortages have been reported, and in Rwanda, because of unfavourable weather conditions. By contrast, Ethiopia's 2002 pulse production is forecast to rise, as farmers were reported to be shifting from cereal crops to pulses in response to depressed local cereal prices in 2001. However, the increase in pulse production could be limited by lower yields due to the early cessation of rains. Total pulse production in South Africa is expected to expand slightly from 2001, with an increase in dry bean output offset by a drop in lupin production. Dry bean production, based on official data indicating larger seeding, is likely to grow by 10 percent over last year, but it would still remain about 20 percent below the previous three-year average, as land has shifted to maize and oilseeds. Production in Nigeria, the largest pulse producer in Africa, is expected to remain at about last year's level.

In Latin America and the Caribbean, pulse production is forecast to expand in 2002 on account of better crops in Brazil and Mexico. In Brazil, the region's largest pulse producer, dry bean production is forecast to expand by about 25 percent in 2002. In Mexico, dry bean production is also forecast to rise due to improved weather and timely rainfall. Chickpea production, by contrast, is expected to fall as land is reported to be shifting to more remunerative crops, including maize and beans. In Guatemala and Nicaragua, dry bean production could register some gains due to better yields, while in Costa Rica, dry bean production is forecast to drop from 2001 as a result of crop damages caused by excessive rains and heavy flooding.

Among the developed countries, production is forecast to fall sharply by 30 percent in Canada to 2.3 million tonnes, on account of lower yields and higher abandonment rates due to unfavourable weather. In the United States, dry bean production is forecast to expand by 40 percent, as a result of a larger seeded area combined with better yields. Dry peas and lentils, however, are likely to be adversely affected by unfavourable weather. In the EU, 2002 pulse production is likely to remain relatively unchanged from last year, with an expected drop in output of dry peas mostly offset by an increase in beans. Production of dry peas, by far the largest pulse crop, could drop below 3 million tonnes, despite an expected recovery to normal yields in some countries, including France, the principal producer in the EU. In Australia, a major pulse exporter, production in 2002 is forecast to drop significantly to about 1.3 million tonnes, almost half of last year's output, and the lowest in more than a decade. Smaller planted areas and lower yields, due to a severe and widespread drought in all major producing regions, are expected to result in lower production levels. Australia's lentil and faba bean production could contract by as much as 70 percent from 2001, while dry pea output could drop by 60 percent.

Pulse trade contracts in 2002

The forecast for world trade in pulses in 2002 has been revised down by 0.5 million tonnes from the preliminary forecast in May, to below 7 million tonnes, largely due to reduced global supplies. The new figure also represents a drop from last year, but is still at about the 1999-2001 average level. World trade in dry beans is expected to expand in 2002, due to a combination of increased export availabilities, larger import demand in many countries and also increased needs for food aid. Trade in dry peas, lentils, chickpeas and lupins is forecast to contract from 2001, largely due to reduced supplies in the major exporting countries. Meantime, global broad bean trade is likely to remain at about last year's level.

Among the major pulse exporters, pulse shipments from Canada and Australia are expected to plunge because of lower domestic production. In Canada, sales of dry peas, lentils and chickpeas are forecast to decline, due to smaller export availabilities, while dry bean exports are likely to remain at around last year's level. In Australia, besides lower output, increased domestic use of dry peas and lupins in feeding livestock, due to shortages in vegetable proteins, is expected to further tighten the situation for export supplies. Dry bean exports by the United States are anticipated to recover in light of increased production and also food aid shipments, mainly to Africa. In the EU, pulse exports are forecast to increase in 2002, based on shipment data indicating larger sales of dry peas to South Asia, and of broad beans, mainly to Egypt. Exports by China (mainland) and Myanmar are forecast to grow further, while exports by Turkey could recover. By contrast, exports are forecast to fall in Argentina, in view of weaker dry bean import demand by Brazil, and in Mexico, as a result of the decline in chickpea production.

On the import side, India's pulse purchases are likely to increase in 2002, despite the expected upturn in domestic production, to meet local demand. In Pakistan, pulse imports, mostly chickpeas, are expected to increase due to slow recovery in domestic production. In the Near East and North Africa, reduced production coupled with growing domestic demand, is expected to result in larger purchases by several countries in the region. Pulse imports by many countries in eastern, central and southern Africa - mainly in the form of food aid - could surge due to the deteriorating food situation in these regions. In the Latin America and Caribbean region, dry bean imports by Brazil and Mexico are forecast to fall this year, in view of larger domestic crops, while purchases by Costa Rica, Cuba and Venezuela could increase. In the EU, contrary to earlier indications, dry pea and lupin imports, constrained by reduced supplies in Canada and Australia, are likely to contract from last year.

Prices to strengthen as export supplies decline

Price expectations for all major pulses, except dry beans, are pointing upward due to reduced supplies in several exporting countries. In the United States, dry pea prices in October averaged 20-35 percent above the same month a year earlier, while lentil prices were 25 percent up. In Canada, producer prices of desi chickpeas in October were about 5 percent above last year's. By contrast, prices of most dry bean classes in the United States, in response to increased production, are continuing to slide to low levels.

The outlook for reduced pulse production in Australia and Canada, two key exporters, may provide the basis for potentially stronger prices in the coming months. In addition, due to the anticipated sharp contraction in stocks in the main exporting countries, prices are expected to be extremely sensitive to any supply or demand shocks. The only pulse for which prices are forecast to continue to be under downward pressure is dry beans, due to a combination of factors. Dry bean production in several major exporting countries, including the United States, China and Myanmar, is expected to rise, leading to stronger competition for export markets, while imports by some key importers, like Brazil and Mexico, are expected to contract due to increases in domestic production.

Prices of Selected Pulses

Source : USDA 1/ Average grower prices. 2/ Average wholesale (dealer) prices.