Outlook 2016: Large pulse stocks cause price pressure
©FLPA/John Eveson/Rex Shutterstock The compound feed trade has taken up the challenge of using more beans from an area 25-30% larger than in 2014.
The first quarter of the crop year from July to September has seen a 79% increase in field bean use in animal feed year-on-year. The season as a whole could see an extra 70,000t of pulses used in feed.
The big crop has had the inevitable impact on feed bean prices, which have slipped further in the past few weeks to put ex-farm values at £120/t to £125/t.
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Pulses markets key points
- Larger pulse crops encouraging higher use by feed compounders
- Bean export trade limited by financial challenges mainly among Egyptian buyers
- Growers warned that only the very best beans will achieve a human consumption premium if stored until late in the season
- Slightly better premium over wheat prices for 2016 beans
The human consumption market is paying a premium of just £15/t to £20/t.
Demand is there, mainly from Egypt, but securing finance is a problem for many buyers so less bulk trade than normal has been done.
Rather than being able to book several cargoes in succession, buyers are having to sell one in order to finance the next load.
“A lot of container exports have picked up the slack, so containers are well ahead of where they would usually be – it is easier to pay for 25t than 6,000t,” says Arron Mayhew, pulse trader at Nidera.
“French beans are poor quality so UK beans are in demand. We are waiting to see what the Australian crop will be like – they should be harvesting in the next month or so.”
While the poor quality French crop knocks a competitor out of the human consumption market, it brings a threat on the feed bean front, in that attempts could be made to offload some of the French excess of feed peas on the UK market later in the season, warn traders.
The British Edible Pulses Association also warns that only the best produce is going to hold the visual quality important for human consumption samples through the winter.
Looking to the 2016 crop, a premium over wheat of about £20/t is available for November, valuing beans at about £148/t.
“On new crop it’s wise to look for premium contracts as it looks as though there will be a decent size crop in the ground again for spring beans,” said Mr Mayhew.