Amid the volatile nature of current grain markets, pulses have broadly avoided the recent chaos, though they are not immune.
Lentil markets in the Indian Subcontinent and the Middle East had been subjected to rising prices long before the Russo-Ukrainian war, reaching near historical highs.
Lentil prices in the past two years have been strongly dictated by food price inflation and the devastating 2021 droughts in Canada and Turkey exacerbating tightness in supplies.
In Australia, bulk export markets have remained key for lentils, as container prices and access in SA remain prohibitively expensive for many traders amid rising global freight costs.
Compared with the eastern states, SA traders are spoilt for choice of port for export.
Since the start of the year, SA's bulk export capacity has caused lentils to drift across the border from Vic at a far cheaper level.
This flow of product is now stymied by the increase in road freight and fuel prices.
Combined with other global factors, the SA lentil market destined for bulk export has consequently shifted back around $1015 a tonne (delivered to major ports), despite the headwinds caused by the higher Aussie dollar.
As far as exports go, lentils see stronger demand during March-May as major destinations stock up for Ramadan and the Eid al-Fitr festival.
Turkey is seeking a rebound in production after their drought-impacted 2021 crop, yet with harvest around the corner, the red lentil crop could disappoint.
Meanwhile, Australia's lentil exports for the season to date rival that of last year's record.
However, with limited carry-in from the previous year, the current pace is not sustainable and will need to slow down in the back half of the year to maintain pipeline stocks.
Canada, the biggest supplier of lentils in the global market, has seen its exports curtailed due to drought-induced supply reductions coupled with port access restrictions from storm damage.
Despite this, Canada's ending stocks will remain near historically tight levels.
The tight global supply situation has caused international lentil prices to surge over the past 12 months; two bumper Aussie crops have done little to temper the market.
In the March-May export window, we see Australian traders stepping into the market to entice the higher level of grower selling for a brief duration, get their fill, then step back.
Such trepidation is understandable since overcommitting is a large risk in highly volatile markets without greater certainty over new crop supplies in the months ahead.
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