Economic and Social Department

 global information and early warning system on food and agriculture

 food outlook
No. 2 Rome, June 2004

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Cereal Supply/Demand Roundup

Box on China Global Cereal Markets


Box on EU Enlargement and FAO Cereal Trade Estimates

Coarse Grains


Ocean Freight Rates


Meat and Meat Products

Milk and Milk Products

Oilseeds, Oils and Oilmeals





Record world production foreseen in 2004


Based on current crop conditions and assuming normal weather throughout the rest of the season, FAO’s first global pulse production forecast for 2004 stands at a record 60 million tonnes, 6 percent above last year.

World Production of Pulses

 (million tonnes)
Latin America & Caribbean5.
North America4.
World 53.3 56.2 55.2 60.3
Developing countries37.942.740.545.3
Developed countries15.413.514.615.0

In Africa, total pulse production in 2004 is forecast to rise by 6 percent to 9.8 million tonnes. In Ethiopia, production recovered from the drought-reduced output last year, increasing 59 percent, to 1.2 million tonnes. Production is also expected to recover in Tanzania as a result of generally adequate rainfall during the main season. In Burundi and Rwanda, two countries with very high per caput pulse consumption, the main season’s crop, harvested in January, was reduced due to poor rain while prospects for the second season, about to be harvested, are uncertain following a dry spell in late April/beginning of May. In Mozambique, the output is estimated unchanged from last year’s normal level. Prospects for pulse crops have improved in North Africa, reflecting adequate moisture conditions in the subregion.

In Asia, 2004 total pulse production is forecast to increase by 15 percent to 29 million tonnes, largely on account of an expansion in India and China. India, the world’s largest producer of pulses, could increase output by 30-percent to 15 million tonnes, reflecting a normal monsoon and a rise in government support prices to stimulate output. In China, pulse production could surge to about 6 million tonnes, as price increases in recent months should stimulate an expansion in plantings. Elsewhere in Asia, Thailand’s output is forecast to expand slightly due to a small increase in sown area; while in Syria and Turkey, two major producers of chickpeas and lentils, favourable weather conditions point to the likelihood of good crops.

Within the Latin American and Caribbean region (LAC), Brazil’s 2004 production, consisting almost entirely of dry beans, is forecast to decline slightly from the previous year to 3.26 million tonnes. In Mexico, dry bean output is likely to remain unchanged at 1.3 million tonnes, while that of chickpeas could drop in view of slack export demand. Good pulses crops are also expected in Honduras, El Salvador and Guatemala. In Nicaragua, the recent harvested main season crop is preliminary estimated at a record level of 210 000 tonnes. By contrast, it is likely to drop in Argentina, reflecting smaller seeded areas.

In North America, pulse production in Canada is forecast to increase by 13 percent this year to 3.5 million tonnes, but in the United States, production is expected to rise only marginally from the previous year to a little over 1.4 million tonnes. Growers are expected to reduce dry bean area, given the sluggish market response to low dry bean supplies, combined with more attractive prices for alternative crops, particularly soybeans. In Oceania, Australia’s pulse output in 2004 could increase by 7 percent to about 2.1 million tonnes.

In Europe, pulse production in the EU-25 is forecast at around 5 million tonnes. France’s dry pea area could increase slightly, while that under broad beans is seen expanding by 5-10 percent, prompted by attractive prices. Among the European CIS countries, Ukraine’s dry pea production is set to recover in anticipation of improved yields after last year’s drought. By contrast, output in the Russian Federation could be hindered by limited input availabilities and a shift towards grains.

Improved supplies to boost consumption


Given the fact that pulse stocks are only held in relatively modest volumes, the larger production forecast in 2004 is expected to give rise to increased utilization also, of about 59 million tonnes, in both food and feed uses. Global food consumption of pulses, which represents, on average, two thirds of overall utilization, is forecast at 39 million tonnes, while feed use could reach 13 million tonnes.

In India, the world’s largest consumer of pulses, total utilization is forecast to rise in view of an anticipated record production and strong imports. In China, dry pea utilization is likely to expand, as it is gaining popularity in the noodle industry. By contrast, Japan’s dry bean consumption could decline, in view of a weaker demand by the confectionary industry. In several African countries, including Egypt, Ethiopia, Morocco and Tunisia, pulse consumption, mostly as food, is set to rise.

In Mexico, dry bean consumption is forecast to grow, a reflection of the falling purchasing power of middle income consumers who are reportedly substituting dry beans for meats as an alternative source of protein. In Australia, Canada and the United States, food consumption of pulses is likely to remain near last year’s levels but feed use could rise. In the EU, shortages in feed grains should stimulate a larger pulse feed use, particularly dry peas.

Overall trade in pulses set to grow


World trade in pulses in 2004 is forecast to increase by 9 percent from the previous year to about 10 million tonnes, reflecting larger supplies in the major exporting countries, coupled with a strong import demand in South Asia, the Near East and North Africa. On a commodity basis, dry pea and lentil shipments are likely to grow, whereas those of dry beans and chickpeas could decline.

In Canada and the United States, dry bean exports are likely to drop from last year, as a result of output contractions in both countries. By contrast, sales of dry peas and lentils are forecast to expand, supported by larger food aid shipments in the case of the United States.

Likewise, Australia’s dry pea and lentil exports are forecast to grow, while chickpea shipments could drop, in view of a smaller crop outlook and low stocks. In the EU, dry pea exports by France are likely to decline, because of strong feed demand by other EU countries; whereas, dry broad bean exports from France and the United Kingdom are forecast to expand in the light of larger crop prospects. In Ukraine, the rebound in dry pea production should result in increased exports. Sales of dry beans by China and Myanmar should continue expanding in 2004, given the geographic proximity of both countries to major importers, Japan, the Republic of Korea and India. By contrast, exports of chickpeas from Mexico and of dry beans from Argentina are forecast to contract, in line with domestic supplies.

Regarding imports, India is forecast to maintain its purchases around last year’s level of 1.8 million tonnes, despite the anticipated boost in local production, as rising disposable incomes are spurring demand. In China, dry pea imports are likely to expand, as a result of growing domestic needs. In the Republic of Korea, imports of dry peas should be stimulated by the recent decision to sharply reduce the import duty on feed peas from 30 to 2 percent under a tariff rate quota (TRQ) of 450 000 tonnes.

Pulse imports by several Middle Eastern and North African countries, almost exclusively for human consumption, are forecast to remain strong this year, reflecting the sustained growth in domestic demand. In Egypt, the Government has recently decided to include lentils and broad beans in the list of subsidized food products, which is likely to result in increased purchases. In LAC, increased domestic needs should stimulated larger dry bean imports by Cuba; while in Mexico, they are likely to remain around last year’s level of 50 000 tonnes in view of the relatively large inventories combined with a tightening of supplies in North America. Under NAFTA, the 2004 duty-free TRQ volume of dry beans amounts to 67 196 tonnes for the United States and 2 016 tonnes for Canada.

Market conditions reveal mixed price expectations


Prices of several pulse types exhibited an upward trend over the past few months. In the United States, prices of dry peas and lentils have strengthened since October of 2003, while those of dry beans have stagnated. In China, customs data show an increasing trend in pulse prices. FOB export prices of adzuki beans soared by 85 percent since November to US$760 per tonne in February. During the same time period, prices rose per US$80 per tonne for mung and kidney beans and by US$50 for lentils. Dry pea import prices increased by US$70 to US$280 per tonne in February.

food outlook

Based on the current indications, dry bean prices are likely to strengthen in the second half of 2004, on account of smaller production prospects in the United States and Canada combined with low overall stock levels. By contrast, dry pea prices could come under downward pressure, reflecting larger supplies in several major exporting countries, namely Canada, Australia, the EU (France) and the United States. However, dry pea price movements, especially of feed grades, are also influenced by price developments in the oilmeal and livestock markets. As for lentils, prices are forecast to weaken in the next few months in response to larger export supplies, whereas chickpea prices might increase, reflecting both a tightening supplies in some large exporting countries and also a bigger production share of kabuli type chickpeas (larger calibre seed), which are more expensive than the desi type.

1.  Pulses include dry beans, dry peas, chickpeas, dry broad beans, lentils, pigeon peas, cowpeas, lupins, vetches and other minor pulses.

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