By FWi Staff
DOMESTIC prices for both peas and beans have dropped sharply this season. Despite lower-than-expected yields, a sharp fall in demand has meant increased pressure on the market.
Feed pea prices are on average £28.70/t down on 1997 at £69.50/t, while beans have also dramatically reduced by £28.90 to £73.90/t.
The lower values are a reflection of depressed world grain prices and the record soyabean crop currently being harvested in North America, said Ian Wallis of Cargill plc.
“As a result, the difference between soyabean meal and domestic pea and bean prices is currently just £40/t delivered, compared to more than £100/t a year ago. This has lead several major national feed compounders to shift away from pulses and into soyabean meal.”
Pulses are struggling with export markets this season, said Julie Goult of Dalgety Agriculture. Exports have been good over the last couple of years but increased production in both France and Canada is proving strong competition.
There is good domestic demand for beans until Christmas, stressed Ms Goult. “However, this will have to be reviewed after the New Year as it may not look so good. We are potentially looking at a large surplus and prices could even ease off a little further.”
Dalgety predicts a larger UK bean crop this year of about 400,000t, with pea harvests down slightly at 350,000t.
Even domestic market use for peas is sluggish. The current pig crisis along with struggling livestock producers across the board will increase surplus further, said Peter King of the Home-Grown Cereals Authority. “Animal prices are falling and with this there will be less demand for feed ingredients.”
However there is some scope for prices to rise. If the domestic supply of grains is tighter than originally thought pulse prices could rise also, noted Mr King.
But the US Department of Agriculture predicted US soya yields down last month, said Ms Goult. “And with pulse prices tracking soya, further pressure could come if predicted harvests turn out to be up.
“I can see trading at these levels until harvest, and thats not pessimistic.”
There is, however, robust demand for human consumption peas, which has helped values move up by around £15/t since the start of the season, reassured Mr Wallis of Cargill. Best quality samples can fetch as much as £160/t, while average samples are at £145-£150/t.
“Good-quality samples can achieve up to a 90% premium above feed values, and this strong demand, helped by the recent weakening of Sterling, is set to continue into next year.”