According to an update from Agriculture and Agri-Food Canada's (AAFC) April outlook report for the 2022-2023 and 2023-2024 crop years, the dry pea market is showing promising trends. For the 2022-23 season, the report highlights that the supply of dry peas has surged to 3.8 million tonnes (Mt), a notable increase from the previous year. Furthermore, Canada's exports are expected to rise to 2.7 Mt, marking a substantial 41% growth compared to the 2021-22 level.
However, the report emphasizes that lower export rates to the US have partially offset the increased demand from China and Bangladesh. One of the primary factors impacting Canadian exports to the US has been the sizeable dry pea crop in the country. Consequently, the year-to-date export figures (August-March) to the US are lower than last year's corresponding period. Despite this setback, Canada's robust domestic supply, steady exports, and domestic utilisation are expected to result in carry-out stocks slightly surpassing the previous year, reaching 0.4 Mt.
However, the buoyant market conditions are not without their challenges. Dry pea prices for all types are expected to witness a sharp decline compared to 2021-22. In particular, dry green peas are projected to maintain a premium of $30/tonne (t) over dry yellow peas, in contrast to the $60/t premium witnessed in the previous year. The month of April witnessed a decline of $35/t in Saskatchewan's yellow farm gate prices, while green pea farm gate prices saw a more modest fall of $5/t.
Looking ahead to the 2023-24 season, Canadian producers are planning to reduce the seeded area by 5% to 1.3 million hectares (Mha), reflecting a cautious approach. Saskatchewan is expected to account for 53% of the dry pea area, followed by Alberta at 40%, with the remaining percentage distributed across other Canadian provinces. As a result of this decrease in the seeded area, production is forecasted to decline to 3.25 Mt, assuming average yields. The overall supply is also projected to decrease by 3% to 3.7 Mt due to lower production levels.
Consequently, exports for 2023-24 are expected to be lower than the previous season, reaching 2.6 Mt, while carry-out stocks are anticipated to be similar to the previous year. As a result, the average price is forecasted to decline further from the levels witnessed in 2022-23, as decreased domestic supply coincides with expectations of increased world production.
Meanwhile, the outlook for dry pea cultivation is more optimistic in the United States. The United States Department of Agriculture (USDA) predicts a 9% increase in the area seeded to dry peas for the 2023-24 season, reaching 1.0 million acres (Mac). This expansion is primarily driven by an anticipated increase in cultivation in North Dakota.
As the dry pea market continues to navigate fluctuating global demand, these developments highlight the need for stakeholders to adapt and strategize accordingly. Producers in Canada face a delicate balance in managing their supply and adjusting to changing export dynamics. With the United States poised for an increase in production, it remains to be seen how these factors will shape the market's landscape in the coming seasons.
(By Commoditiescontrol Bureau; +91-9820130172)
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