Pakistan push a volatile rise for chickpeas
Pakistani demand for Australian chickpeas has pushed prices
The potential of a poor chickpea crop in Pakistan, coupled with depressed prices for the pulse in Australia, have led to a welcome though volatile rally in the past fortnight spiking $100 per tonne to $670/t earlier this week, delivered Darling Downs.
This is good news for many producers who struggled through a poor harvest and terrible prices and decided to store grain rather than sell. That was before the news came through about India’s massive tariff hike.
“No one was buying then,” recalled Goondiwindi grain trader Geoff Webb, Goldstar Commodities. “We had a few low-ball bids around $500/t but could still get a bid of $560/t at its worst.”
At the time low prices favoured some growers. Moree producer and trader Charles Brett, Bullarah, forward sold his crop at its peak. Chickpeas at the Bullarah farm failed completely – they didn’t even send in the header – but Mr Brett found no trouble replacing his consignment with a less expensive product. Dealing with a poor chick pea harvest on his son’s farm at Toobea via Goondiwindi was the bigger hassle.
“The peas were small because there was no water throughout the growing season until the end which then created mould and discolouration issues,” he said. “Delivering the correct quality to contracts was a nightmare. A lot of people have been caught holding stock that they would not usually have.”
Now there is buyer interest and for those with stored chickpeas the current spike is a blessed opportunity, but traders are reluctant to suggest it will last.
“Pakistani demand is historically fickle,” said Mr Webb. “It is a minor market taking some 400,000t/year compared to India’s millions of tonnes and predicting a crop is substantially more difficult than in Australia so traders expect the deal to come with volatility.”
“Oh, it’s volatile at present,” agreed Associated Grain’s marketing manager Mark Schmidt, Dalby. “Most traders are buying back to back where we purchase 500t today and we sell 500t, so we are not exposed to market fluctuations.”
Adam Robinson, Robinson Grain Trading, warned about new stringent import permit restrictions, with requirements demanding the pulse be machine dressed and bagged, rather than farmer dressed and bulk.
The current market was being supported, he said, by Pakistani traders with old permits, still valid.
“Two weeks ago when this rally started Australia prices were below that of what traders could buy in Pakistan,” he said. “Now it’s up and we’re seeing a slow down in their import requirement. It is getting harder to get business done at the higher price.”
Geoff Webb, Goondiwindi, concurred saying a sustained rally required the kind of demand generated by the likes of India, not Pakistan or Bangladesh, although traders were hopeful that those two smaller Muslim countries would “tidy up what’s left over of Australian chickpeas.”
The fact that there are some forward order through February into March suggests that demand – as well as permitation – remains for this week, but ...
“If anyone tells you they know what’s going on with this Pakistan spike then they are a big fat liar,” said Mr Webb. “No one knows. We can’t even predict our own crop let alone theirs.”