Vegetarians Are Getting Lentil Sticker Shock With Canadian Crops Shrinking

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A worker ladles lentils onto a dish for breakfast for children in an anganwadi center, a feeding center operated by Integrated Child Development Services (ICDS), in the village of Semahado, Maharashtra, India. Photographer: Sanjit Das/Bloomberg

A year after record deluges damaged the lentil crops in Canada, vegetarians across India are getting sticker shock for legumes they eat at almost every meal.

Stockpiles in Canada, the world’s biggest exporter, are down by half from a year earlier, government data show. At the same time, shipments to India, the top buyer, are headed to an all-time high after a dry spell reduced its domestic output. That’s boosted prices for all kinds of similar crops, including chickpeas and dried beans.

“We’re going to be sold out this year,” with supply remaining tight at least until the Canadian harvest starts in August, said Murad Al-Katib, chief executive officer of Regina, Saskatchewan-based AGT Food & Ingredients Inc., the largest processor and exporter of dried peas and lentils.

Demand is growing for the high-protein legumes known as pulses. General Mills Inc. and Kraft Foods Group Inc. are adding them to breakfast cereals, energy bars and salty snacks as health-conscious consumers seek products with no gluten or genetically modified ingredients. AGT is expanding operations as sales surge 40 percent this year.

Record rainfall last year in Saskatchewan, which produces almost all of the country’s lentils, reduced quality supplies by more than 15 percent, Agriculture and Agri-Food Canada said. Output of all pulse crops tumbled 10 percent.

“It was a difficult growing season,” said Morgan Nunweiler, who produced 20 percent fewer lentils last year on 2,000 acres he farms in Rosetown, Saskatchewan. “Excess moisture led to higher disease, a lot of root rot, which both took away some yield and quality.”

Exports Surge

On March 31, domestic lentil stockpiles were 434,000 metric tons, down 54 percent from a year earlier, and dry field peas fell 34 percent to an seven-year low of 1 million tons, Statistics Canada said in a May 6 report. Lentil exports will reach a record 1.8 million tons by the end of July, and dry-pea shipments remain on a record pace, the government data show.

Farmers are getting as much as 40 Canadian cents (32 U.S. cents) a pound for certain varieties of lentils, almost twice as much as a year ago, said Nunweiler, a director at the Saskatchewan Pulse Growers. Green-lentil prices are the highest since at least 1992, and yellow peas have risen 34 percent from a year ago, according to government data from Saskatchewan.

“We are starting to run low,” said Chuck Penner, owner of LeftField Commodity Research in Winnipeg, Manitoba. “The fact that prices are going up means that they’re not finding all of the lentils or the peas they’re hoping to get.”

Planting More

High prices probably encouraged farmers to expand planting of peas and lentils earlier this year, especially with wheat and canola prices down from last year.

Growers can generate C$700 of revenue for each acre producing more than 40 bushels of lentils, compared with about C$500 on average for wheat, said Nunweiler, the Saskatchewan grower. Lentil planting probably increased 7.7 percent this year, while dry-pea acres were forecast to rise 0.9 percent, Statistics Canada said in an April 23 report.

Brad Heidt expanded lentil planting on his Saskatchewan farm to 3,000 acres from 2,000 last year, including some extra land rented from a neighbor. Heidt said he’s already pre-sold this year’s output for 32 Canadian cents a pound, the most he’s ever gotten for a forward contract.

Indian Buyers

Such high prices spell trouble for more than a billion people in India, where legumes are a staple for vegetarian Hindus. After a weak monsoon season, domestic output is down for the first time in three years. In the year ending June 30, production will drop almost 10 percent to 17.38 million tons from 19.25 million a year ago, the Agriculture Ministry says.

To make up for the loss, imports will rise to 4.5 million tons in the 2015-2016 season, from an estimated 4 million this year and 3.05 million a year earlier, according to the India Pulses and Grains Association.

Legumes such as lentils, chickpeas, black grams and pigeon pea are often cooked with curry spices, sauces or butter and eaten at most meals with rice and Indian flat bread.

“Lentils are not cheap, and the prices have gone up, but I can’t reduce my lentils intake,” said Chote Yadav, a 55-year-old Mumbai taxi driver who is a vegetarian. “It is my only source of protein.” He spends about 500 rupees ($7.81), the equivalent of a day’s wages, on a monthly ration of 8 kilograms of lentils for his family of four.

The price of Indian chickpeas reached 68 rupees a kilo this month, up from 50 rupees a year earlier and double what they were in May 2009, government data show.

“India looks like they’re going to need to buy more, and they’ll have to pay if they want the crop,” said Brian Clancey, president and senior market analyst at STAT Communications Ltd. in Vancouver. “Everyone’s paying more.”

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