Share of alternate crops in Ukraine, especially pulses, continues increasing along with the fast development of the general market of agricultural crops. Herewith, taking into account the Indian policy towards the imports of pulses and the obstacles in terms of sales of peas and chickpeas, Ukrainian agrarians should think over the planting campaign of some other crops.
The most perspective crops and their features became the main issue of our interview with the CEO of LCC Avas-Trade Ukraine, Valentina Petrenko.
- Valentina, how did the Ukrainian market of crops change over the lifetime of Your company? For how much did the share of pulses increase?
LLC Avas-Trade Ukraine was founded in 2010 for operations in the alternative segments of the agriproducts. In particular, we emphasize the importance of lentils and chickpeas in our work. Whereas, I should note that pulses has always been interesting for some of the producers.
First of all, it is about the price. The price depends on the global demand rate on the product only and is formed by the international markets and countries which consume pulses. Thus, if the prices are low there is a risk for the exports to be low.
On the other hand, the vast majority of the producers fear to grow pulses (especially chickpeas and lentils). The reason is the absence of clear growing technologies. Moreover, most of the producers fear of the absences of pot-emergence herbicides for chickpeas and lentils.
If we analyze the period 2010-2017 than we can say that the demand rate for pulses was rather stable. Whereas, during 2013-2014 the prices sizably decreased. It was particularly evident on the market of chickpeas and was due to the large harvest in major producing countries. Since 2015 the prices on chickpeas started increasing slightly and by the end of 2017 reached its maximum. However, this applies only chickpeas.
For now, the pulses acreages in Ukraine have increased sizably. In particular, chickpeas and lentils are cultivated in every oblast of Ukraine, whereas previously it was grown only on the south and east of the country.
- Among the main activity areas of Your company it is possible to specify the exports of pulses. How did the list and geography of exports change for several recent seasons?
Generally our company exports chickpeas and lentils to Turkey, India, Saudi Arabia and Poland. Earlier we exported it to Turkey only and some small volumes to the EU. Honestly, we do not like to export yellow peas because of the fact that the prices at the beginning of the season are very volatile. Taking into account high volatility there are some risks to consider as many global buyers have quite strict export requirements.
- We should not neglect the import tax hike on chickpeas and lentils in India – the main market of pulses. How strongly has it influenced the global and Ukrainian pulses market?
I suppose it is connected with the inner policy of the country as in May India will be seeing the presidential elections and many experts forecast some changes. India is a main global importer of pulses, thus many global sellers export the product to India. That is why the implementation of taxes on chickpeas and lentils firstly led to the peas’ price decline, followed by the lentils’ price rise by 2018. For now, we can observe the second wave of price reduction on chickpeas in terms of tax increase. The further upward pressure on prices is based on the absence of demand in India which has harvested its own chickpeas. I would note that the harvest is quite good one and the stocks can provide the domestic consumption during several months. The big traders had to reduce the prices on chickpeas to the range of 750-850 USD/t. I expect that the prices on chickpeas in the future season are going to reach 700 USD/t.
- In 2017/18 MY, Ukrainian agrarians produced the record harvest of peas. Taking into account the Indian policy in the current season, is the production rate going to decline? What markets should the Ukrainian traders consider as alternative?
I do not think that the large producers abandon to grow peas. I suppose that peas has even bigger marginality over the traditional crops (wheat, barley or corn).
If we speak about chickpeas, Europe is the most perspective market due to the fact that the prices are higher there. Herewith, you should note that in the EU the quality requirements are also very high.
- Your company specializes in growing of pulses. What crops, in Your opinion, are the most cost-effective and perspective?
Our company specializes in growing chickpeas and lentils. In general, I would note that it is very difficult to forecast the market dynamic and the prospects for the crops growing. I believe that it is necessary to plant different crops – alternate ones, grains and oilseeds. Thus, in case of price reduction on one of the crops, you would be able to profit from the other one.
- What do You consider one of the main obstacle in terms of the increase of both the production and exports of pulses from Ukraine?
There are many complexities and nuances in terms of any crops exports. The key to the proper functioning of the company is the stable demand rate and the stable market channels. Thus, it is necessary to work over the fence mending with the global importers, which would both buy the product and pay for it in time.
- In order to increase the yield and quality of pulses, the plant protection products are very important. In particular, speaking about chickpeas growing, it is the TOP-issue. What are the ways to solve it?
The availability of the corresponding plant protection products for chickpeas is absolutely the TOP-issue. However, for our company this issue is not critical as we have our own technology which we use every year and modernize it. If we speak about the last several years, I would say that in general the producers started to pay more attention to the growing of pulses. Apart from the acreages that we have, we also sell the seeds of chickpeas and lentils, give some recommendations and provide the information during all stages of vegetation period of these crops. From my inspections, I would say that everyone who planted chickpeas and lentils in 2017 collected good harvest (the yield reached 2.5-3 t/ha).
- What do You think about the prospects of beans, vetch and esparcet in terms of exports and processing? What are the features of these crops for the Ukrainian market?
For now, we are not engaging with beans and esparcet. Vetch is an attractive crop for us but it is connected with the global market. Some EU countries are interested in importing this crop. In 2017 Ukraine had a good harvest of vetch, however this season prices have decreased in comparison with earlier seasons.
At the same time, it is hard to say anything about the prospects of these crops. In general, they are exported but the volumes are not as high.
- In the end I would like to ask about Your company expectations and plans for 2018/19 MY?
In 2018 the acreages of pulses (chickpeas and lentils) are going to increase. One of the reason for this is that small and medium farms growing soybeans have not gained enough profit due to the soybean yield decrease. Moreover, the harvest of sunflower seeds was rather small. Thus, many agrarians are considering crop rotation. Taking into account the fact that the chickpeas prices are quite interesting for the farmers, we can observe the high rate of the demand on the crop.
Our company plans to increase the acreages of chickpeas and lentils. There is also a possibility that we will plant some new unique crops but for now it is a company secret.
It is difficult to predict the future season activity as the crops quality is affected by the weather conditions in Ukraine. We can only hope for the good harvest and high demand for pulses.
Interviewed by Anna Tanskaya, APK-Inform Agency
