Economic and Social Department

 global information and early warning system on food and agriculture

 food outlook
No. 3 Rome, June 2003

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Highlights

BASIC FACTS OF THE WORLD CEREAL SITUATION

Cereals

FOOD EMERGENCIES PERSIST IN MANY COUNTRIES

Current Production and Crop Prospects

Trade

Carryover Stocks

Large Reduction in World Cereal Stocks

Export Prices

Ocean Freight Rates

Cassava

Oilseeds, Oils and Oilmeals

Pulses

Sugar

Fertilizers

Appendix Tables

STATISTICAL NOTE

Pulses

World production of pulses seen recovering in 2003

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Global pulse production in 2003 is forecast to increase to 54.4 million tonnes, which would be 2 percent up from last year and 1 million tonnes above the average of the past three years. Output in the developed countries is expected to increase by close to 20 percent from 2002, more than offsetting the contraction anticipated in the developing countries.

World Pulse Production

 200120022003
forecast
 ( million tonnes.)
Africa8.79.08.8
Asia23.625.324.5
Europe7.97.78.1
Latin America & Caribbean5.56.26.1
North America4.63.95.0
Oceania2.31.11.8
World 52.5 53.3 54.4
Developing countries37.540.239.2
Developed countries15.013.015.2
Source: FAO

In Africa, total pulse production in 2003 is forecast to decline by 2 percent from last year to about 8.8 million tonnes, but would remain above the 2001 and 2000 output levels. In Ethiopia, despite an increase in area planted, pulse production could drop by as much as 20 percent from 2002. Yields are expected to fall as a result of poor rainfall and reduced input use. In Burundi and Rwanda, two countries with very high per caput consumption of pulses, production, consisting mostly of dry beans, is forecast to decline this year due to a serious delay in the start of the rainy season. Also scarce seed availability reported in Burundi could have a negative effect on plantings and yields. Mozambique’s pulse production is also expected to fall in 2003 from last year’s level due to severe dry weather during the start of the season. By contrast, in several other eastern African countries, including Kenya, Malawi, Sudan and Tanzania, crop prospects are favourable due to improved weather and moisture conditions and production could increase somewhat over last year. Likewise, 2003 pulse production in North Africa is forecast to increase, as generally adequate rains are expected to bring yields back to average levels after three predominantly dry years. Nigeria’s pulse production, which consists almost exclusively of cowpeas, could rise, albeit slightly, in view of generally good growing conditions.

Asia’s 2003 pulse production is forecast at 24.5 million tonnes, down 3 percent from 2002, largely on account of an expected decline in India’s output. Total pulse production in India, the world’s largest producer of pulses, is expected to drop by 1.7 million tonnes, or 12 percent, from the previous year to about 11.8 million tonnes, due to low rainfall and bad weather during the post-monsoon period. The bulk of the reduction is in chickpea production, which could drop by 15-20 percent, while dry pea and lentil outputs are expected to decline by smaller amounts. Indian pulses are grown during both the Kharif (autumn) and Rabi (spring) seasons, with the latter contributing a bigger share to the country’s total production.

Other parts of Asia, however, could experience larger pulse crops in 2003. In Myanmar, despite some crop damage caused by untimely rainfall, pulse production in expected to grow this year due to increased area. Myanmar’s pulse production expansion continues to be driven by the export market. In fact, pulse exports have become a major source of foreign exchange earnings for the country. Thailand’s pulse production is expected to rise in 2003, as attractive returns prompted farmers to expand the area panted to dry beans. Production prospects in the Islamic Republic of Iran, Syria and Turkey, where the bulk of the crops consist of chickpeas and lentils, are favourable, reflecting improved weather and moisture conditions. Similarly, Pakistan’s chickpea production is expected to increase substantially this year.

In the Latin America and Caribbean (LAC) region, Argentina’s 2003 dry bean production is anticipated to drop from last year, based on data indicating smaller plantings. The country’s black bean area appears to have dropped sharply as farmers are showing more interest in soybeans in expectation of better returns. In both Brazil and Mexico, dry bean output is forecast to decrease in 2003, as relatively lower prices, in response to ample supplies due to bumper crops in the previous year, are likely to influence negatively growers’ planting decisions. Mexico’s chickpea production is also likely to drop in view of a slack demand. Dry bean output, by contrast, could increase in some other LAC countries, primarily in Costa Rica, Guatemala and Nicaragua.

Among the developed countries, in Canada, based on information from recent seeding intention surveys and assuming normal weather conditions, pulse production in 2003 is forecast to recover by as much as 50 percent from last year’s drought-reduced output to about 3.5 million tonnes, with expected increases for all pulse types, except dry beans. Canada’s pulse production dropped sharply in 2002 due to low yields and high abandonment rates, as a result of a severe drought. In the United States, by contrast, total pulse production is forecast to contract by 8 percent to about 1.5 million tonnes, with an anticipated decrease in dry beans more than offsetting increases in dry peas and lentils. The dry bean area is forecast to decrease by 21 percent due to a combination of factors including low producer prices as a result of last year’s large harvest and more attractive prices of alternative crops like wheat and soybeans. Dry pea and lentil areas, on the other hand, are likely to expand this year in response to higher prices in 2002. In addition, the recent decision by the Government to offer loan deficiency payment rates based on feed grade peas and No. 3 lentils could bring more land into these crops. In Australia, a big exporter of pulses, total pulse production is forecast to rebound from last year’s low output that was severely affected by a widespread drought. This year, assuming normal weather, Australia’s pulse production is forecast to rise by as much as 70 percent from the previous year’s poor crop.

In the EU, pulse production is expected to rise this year to over 8 million tonnes, with an increase in dry pea output more than offsetting a decline in beans. In France, the principal dry pea producer in the EU, the area is forecast to expand by about 10 percent. By contrast, bean production in Spain and the United Kingdom are foreseen to contract slightly. Elsewhere in Europe, dry pea planting is foreseen to expand in Ukraine, due in part to the frost damage to wheat and barley crops, which may be replaced by peas; however, the increase could be to some extent constrained by the availability of seeds, which must be imported. Nevertheless, the country’s 2003 dry pea output is expected to increase by close to 30 percent.

Trade in pulses to increase modestly in 2003

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Limited supplies of pulses in the major exporting countries, along with strong prices, are likely to constrain growth in global pulse trade in 2003, tentatively forecast at approximately 9.5 million tonnes. Slow growth is expected especially for lentils and chickpeas, and to a lesser extent for dry peas, while dry bean exports are forecast to grow the fastest.

Pulse exports from Australia and Canada are likely to fall from the previous year, reflecting lower exportable supplies as a result of reduced production in 2002. In Australia, another factor which could lead to tightening of exportable supplies is an increase in domestic demand for dry peas and lupins in feed rations due to shortages in vegetable proteins. Mexico’s 2003 chickpea sales also are expected to decline due to lower availability and slack export demand. Myanmar’s pulse export prospects are also bleak due to the financial crisis that erupted in early February, resulting in the collapse of the country’s twenty private banks. The lack of capital for trade transactions could have severe effects on Myanmar’s exports this year, unless a quick solution is found.

By contrast, exports by the United States, particularly of dry beans, are forecast to rise in 2003, in light of increased production and expected relatively strong PL-480 food aid shipments. In the EU, France’s dry pea exports are likely to expand in 2003, despite a slow pace of sales early in the year. Broad bean exports, mostly to Egypt, could rise significantly; however, these prospects may be hurt if the Egyptian Pound continues to depreciate against the Euro. Ukraine is emerging as a strong exporter of dry peas this year, given the expected sharp increase in production. Pakistan is expected to turn to a net exporter of chickpeas this year, owing to the large increase in domestic production.

On the import side, in South Asia, India’s pulse purchases are forecast to increase in 2003, to compensate for the decline in domestic production and meet a growing local demand. In the Near East and North Africa, several countries are likely to witness larger purchases reflecting a growing domestic demand. In sub-saharan Africa, imports of pulses are forecast to rise in 2003, largely reflecting increased food aid shipments to some countries, especially Burundi, Eritrea, Ethiopia and Mozambique where 2002 crops were reduced by drought. Among the LAC countries, dry bean imports by Mexico, an important market in the region, are forecast to go down in 2003, as a consequence of large carryover supplies from the previous year, while Brazil is seen returning to being a net importer again in anticipation of a drop in domestic production.

Prices likely to remain firm in the coming months

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International prices of pulses, except dry beans, are likely to stay strong in the next two to three months in response to tight exportable supplies in the major exporting countries, namely Australia and Canada. In the United States, dry pea prices in the first quarter of 2003 averaged about 20-40 percent higher than the same period last year, while lentil prices increased by over 80 percent. Prices of most dry bean classes, by contrast, continued their downward trend, averaging 30 percent lower during the first quarter of 2003 than a year ago, in response to ample supplies from last year’s substantial increase in output.

Prices of Selected Pulses

 U.S. Pinto Beans
1/
U.S. Dry Green
Peas 2/
U.S. Dry Yellow
Peas 2/
U.S. Lentils,
Regular 2/
 ( US$ / tonne )
2002    
January474230249288
February575233254284
March597241255285
April606247267300
May613248266298
June604246259297
July540239261294
August511237244297
September395245240336
October368283269389
November355298277411
December370303305429
2003 3/ /    
January362325292485
February428323298529
March342346307555
Source: USDA
1/ Average grower prices over all bean classes. 2/ Average dealer prices
3/ preliminary

However, the price situation could be reversed towards the end of the year, with the arrival of new crops in Australia, Canada and the United States, three major pulse exporters. If crops in these countries turn out to be normal this year, prices could come under downward pressure, in particular for dry peas, chickpeas and lentils. Dry bean prices, on the other hand, could pick up, in light of expected output contractions in the United States and Canada. In addition, due to the sharp contraction in pulse stocks in the main exporting countries, prices are anticipated to be extremely sensitive to any supply or demand shocks.

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