A Spike in Global Demand for Lentils Amid Shortages

Fresh Common Pea

Canada

Turkiye

Published May 20, 2020

Global lentil demand is spiking due to the combined effects of little remaining stocks from the 2019/2020 crop year, logistical issues, and increasing demand for non-perishable food products and alternative sources of protein. There is expected to be continued high demand for lentils from two major exporters Canada and Australia in the upcoming 2020/2021 crop year.

Global lentil demand is expected to continue increasing in 2020. This is due to the combined effects of a shortage of stocks from the previous crop year, logistical issues, and increases in demand from customers looking for nonperishable food products and alternative sources for protein, particularly pulses such as lentils, soybeans, and peas amid the closures of meat processing facilities.

Subsequently, Canada, as well as other major exporters have witnessed an increase in demand. According to Tridge data, global wholesale prices of lentils have risen by 10.3% during the last quarter.

High Demand for Canadian Lentils Amid Low Remaining Stocks

Canada is the world’s biggest producer and exporter of lentils, accounting for almost 55% of the world’s export share in 2019. Prices have increased significantly throughout the beginning of 2020 and many Canadian suppliers are completely sold out of the remaining 2019/2020 crops. As the prices started climbing in April, Canadian lentil suppliers have not been able to prepare for the demand spike and supply additional crops, as seeding for the 2020/2021 season had already come to an end.

Thus although the 2020/2021 harvest is set to begin in August and September, experts believe prices will continue to rise as the global lentil supply is expected to be lower next year, down from an already low volume of 557K MT at the end of the 2019/2020 crop year.

Exports to Rise for Canadian and Australian Lentils

While the Black Sea Region has been a growing source of lentils in recent years, the fifth-largest exporter, Russia, is expected to decrease its production as its export focus has shifted to wheat, which currently has competitive export prices. In addition, the sixth-biggest exporter, Kazakhstan has closed its borders to keep lentil stocks within its domestic market, substantially reducing competition from the Black Sea for this season.

In early 2020, Canada has exported more than 1.6 times its export volume from the same period a year ago, with approximately 700K MT already shipped. Producers are also planning to increase red lentil production areas by 300K acres this year.

Australia, the second-largest exporter, is currently down to approximately 50K MT in lentil stocks produced in the 2019/2020 season, with the remaining inventory expected to be sold out by July. The country is expecting a 10-15% increase in planting acres and a production volume of 450K MT, an increase from 338K MT last year. As the harvest for Australia, however, begins in November, Canada will be the main sourcing destination for importers until the Australian harvest commences.

Global Lentil Imports to Increase

Thus global consumption for lentils is expected to increase by 500K MT in the upcoming crop year, especially in major exporting markets for Canada and Australia. Imports from India, the biggest worldwide importer, are expected to increase this season as the government is currently running out of the pulse stocks it had been accumulating over the past few years due to supply disruptions from COVID-19.

In addition, the Indian government has set a three-month plan to provide a kilo of pulses each month to 160 million Indian families in order to mitigate the economic consequences of the nationwide lockdown, which is also expected to aid in boosting lentil imports. The forecast is at 567K MT of imports in terms of volume, a slight increase from the 2019/2020 crop year.

Other Asian and Middle Eastern importers are also expected to either maintain or increase their import volumes. Sri Lanka’s estimated lentil exports are higher than last year’s at 175K MT as the government has halted exports of the crops and is selling red lentils at a lowered price in the domestic market. Turkish exports are at a continuously large 300K MT and Pakistan has already purchased 40K MT in 2020 until this point. Imports from Bangladesh are also expected to be consistently high for 2020/2021.