If excessive costs actually are the treatment for prime costs, then the dry pea market could possibly be doing its job.
In the wake of final summer season’s Prairie drought that slashed Canadian pea manufacturing by roughly half, costs have surged and exports have levelled off – suggesting the market might have come far sufficient now to at the least kill off some demand, Chuck Penner of LeftField Commodity Research stated as a part of digital presentation on Monday on the annual assembly of the Saskatchewan Crop Organizations.
China specifically has pulled again sharply on its shopping for, Penner stated. With Yellow pea costs on the Prairies reaching as excessive as C$17/bu, he stated that nation’s import volumes are approach down from calendar 12 months 2020, when it bought about 3 million tonnes of Canadian provides. Other price-sensitive nations in Asia additionally seem to balking on the excessive costs, he stated.
Instead, Penner stated different dry pea producers have stepped into the breach, with China apparently downgrading its phytosanitary necessities to just accept lower-priced peas from the Black Sea area, together with each Russia and Ukraine. In reality, because it stands in the present day, Canadian peas are priced at a premium to basically each different international provider, he stated.
Even extra notably, the US has additionally been an importer of peas from Ukraine in 2021-22, Penner stated, a powerful indication that both Canada merely doesn’t have sufficient provide accessible to serve that nation’s wants, or that Canadian costs have risen to the purpose that it makes extra sense financially for American importers to supply abroad as an alternative.