Ukraine - subtotals of peas and chickpeas market in 2016/17 MY

Source

APK-Inform

4575

 

In 2015/16 MY, market exporters showed great interest to peas resulted in essential increases of prices and expanding the planted areas under the crop. Therefore, in 2016/17 MY Ukrainian farmers harvested record peas crop, while growth prices was moderate. In its turn, deficit of chickpeas offers resulted not only in lack of seasonal reduction of prices, but contributed to higher prices in the beginning of 2016/17 MY. More detailed about development of the specified market segments you may read in our material.

 

Peas market

Low margins traditionally constrained Ukrainian agrarians of significant increase of production volumes. However, in 2016/17 MY agrarians reviewed the areas under the crop and boosted them from 170 thsd ha (2015) to 239 thsd ha (2016).

Such tendency was caused by rather high interest from crop processors, as well as export-oriented companies that resulted in high bid prices in the second half of 2015/16 MY. Thus, according to APK-Inform analysts, in the current season peas production in Ukraine totaled 746 thsd tonnes that is two times more than the previous season (378 thsd tonnes).

Hereinafter, the export potential of Ukrainian peas in the current season is estimated by APK-Inform analysts at 500 thsd tonnes that exceeds indicators of last two seasons (233 thsd tonnes in 2015/16 MY, and 183 thsd tonnes in 2014/15 MY). Also, the domestic consumption increased, however not so essential due to decrease in consumer activity of the population.

As for the quality characteristics of peas, there were no special complaints since the beginning of 2016/17 MY and most market participants estimated it conforming to requirements of state standard specification. Some information about worsening of peas quality began arriving at the end of March only.

 

Peas production in Ukraine

 

2014/15

2015/16

2016/17

Planted areas, `000 ha

156

170

239

Yield, t/ha

2,3

2,2

3,1

Production, `000 tonnes

359

378

746

Hereinafter, source: APK-Inform Agency

 

Price situation

In the reporting period, domestic prices for peas rose rather moderately, however they didn’t reach the maximum figures of 2015/16 MY (9`000-9`800 UAH/t CPT).

The key factors of pricing in peas sector in 2016/17-season were:

- high demand of export-oriented and processing companies resulted in great increase of export shipments from the one hand, and rise of domestic consumption from the other;

- record-breaking harvest of peas.

Since the start of 2016/17 MY, the prices began falling due to rather active receipt of offers.

The bearish trend was fixed in this segment from July to October, 2016 when the prices fell to the lowest marks – 6`000-7`000 UAH/t CPT. It should be noted that at the end of April, 2017 the bid prices ranged mainly within 6`200-7`000 and 7`200-7`700 UAH/t CPT on yellow and green peas respectively. To date, market participants report about bearish price trend in the sector of yellow peas, while the prices for green peas are supported by stable demand.

 

 

 

In its turn, the upward price trend prevailed on CPT-port platform throughout 2016/17 MY that was promoted by the following factors:

- essential increase in exported volumes;

- increasing of prices in the adjacent markets.

Prices reduction was fixed only in the beginning of the season. Thus, in August 2016 the prices decreased to minimum 6`900-7`350 UAH/t CPT-port and then began gradually increasing due to influence of the adjacent markets. Let us note that active prices increasing in the current season was interfered by sufficient number of offers that resulted in low volatility of this segment.

In April 2017, the prices of peas mainly varied within 7`200-7`700 UAH/t CPT-port, being exposed to adjustments, proceeding from purchasing activity of traders. For comparison, at the end of 2015/16 MY the purchasing prices were much more higher and totaled 9`600-10`100 UAH/t CPT-port due to deficit of offers.

The rates of purchasing-trade activity throughout the expired period were rather stable, while the general amount of export deliveries significantly exceeds last year's.

We should note also, that during first 2 months of the current season there were exported approximately 192 thsd tonnes of peas. Thereafter, monthly deliveries began to decrease a little and rose again in February that demonstrates increase in demand and can lead to prices rising in the short term. According to market participants, demand of exporters will provide the main influence on pricing.

 

 

 

Chickpeas market

According to APK-Inform estimations, the harvested areas under chickpeas in the current season totals 7.1 thsd ha, while the planted areas - 7.3 thsd ha.

At the same time, the average yield of the specified crop was estimated at 0.92 t/ha, while the quality was assessed rather ambiguously. The adverse agroclimatic conditions during maturing and harvesting became the reason of the reduced quality. It should be noted that in the first half of a season delivered batches of the crop conformed to requirements of state standard specification. At the same time, most of buyers experienced difficulties with acquisition of high-quality raw materials in the second half of MY. Clearly, some problems with quality affected price dynamics.

 

Chickpeas production in Ukraine

 

2016/17

Planted areas, `000 ha

7,3

Harvested areas, `000 ha

7,1

Yield, t/ha

0,92

Production, `000 tonnes

6,49

Hereinafter, source: APK-Inform Agency

 

Price situation

The price situation in the current season was characterized by an upward trend with the key factors such as:

- great demand of export-oriented and processing companies;

- reserved sales of large-capacity batches by agrarians;

- limited number of offers for high-quality chickpeas.

From the first weeks of 2016/17 MY the prices of chickpeas began to raise actively. During the period from July to March demand/offer prices grew by 5`000-10`000 UAH/t and by the end of the specified period reached 23`000-28`000 UAH/t CPT and 24`000-31`000 UAH/t EXW, respectively. Remind that last season the maximum prices for the crop didn't exceed 14`000-18`000 UAH/t CPT and 15`000-26`000 UAH/t EXW.

The prices began falling only in the first week of April that was caused by low qualitative indexes of leguminous coming to the market. Many market participants considered to reduce the prices by nearly 2`000-4`000 UAH/t. Now processors inform on offers deficit and announce mainly the declarative bid prices in the range of 18`000-26`000 UAH/t CPT. Agrarians, in it’s turn, inactively conduct sales of chickpeas, fixing selling prices within 20`000-29`000 UAH/t EXW. In the short term market operators don't expect essential changes of either a price situation, or trade activity in view of lack offers for large amounts of grain with high quality.

 

 

"Throughout all the season purchasing prices varied in the range of 18`000-25`000 UAH/t CPT, however a maximum price we gave on chickpeas for caliber at least 5-7 mm – 27`000 UAH/t CPT. At the same time, large-fruited leguminous were present at the market also at higher prices. I will note that large-capacity batches were offered mainly by agrarians of Odessa, but general amount batches was 100 tonnes. The question of quality became a key problem for this season, because of rainy weather throughout spring and summer that did influenced the quality of leguminous. In particular, there were a large amount of the raw materials infected with fusariosis and other fungal diseases. However, rainy weather was not the only reason of low qualitative indexes. A certain impact was exerted by a low-quality desikation, and also almost total absence of remedies intended definitely for the chickpeas. Thereof, some agrarians applied the medicines oriented to peas, soy and others bean that was pernicious for chickpeas.

As for the prospects, the quality of new crop will depend mainly on weather conditions.  Some entities have already seeded leguminous, and the cold snap at the end of April can negatively affect crops. At the same time, chickpea is more or less steady against frosts, and the main requirement is its planting to the heated-up, damp soil. Thus, shoots promise to be good as this technology was sustained", - comments on a situation Valentin Petrenko, the Director at LLC AVAS TRADE UKRAINE.

 

Anna Tanskaya, Anna Elizarova, APK-Inform Agency

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