Western Canadian pea prices have declined the last month amid decreased demand from India and expectations of a very strong Canadian crop, according to Jackie Kress, senior grain manager for Legumex Walker.
India is Canada's largest yellow pea exporter, but with a large chickpea crop and a rupee that has been declining in value, demand for the Canadian product isn't expected to be as high as previous years.
"Well, of course, the weak rupee has an effect on exports into the Indian subcontinent," said Kress. "Anytime a currency is devalued, their ability to purchase is put in a bit of a stranglehold."
According to Agriculture and Agri-Food Canada's Aug. 13 outlook for principal field crops, exports for this season are forecast to be 200,000 tonnes lower than 2012-13.
Expectations of very good yields and production across the Prairies added further to the market's bearish tone, said Kress, who's based in Saskatoon.
"Expectations are greater than last year," she said. "There are some very nice crops out there. Buyers are re-evaluating the prices simply because they're expecting large volumes and excellent quality peas. They're trying to figure out exactly where prices are going to end up."
As of Monday, Prairie Ag Hotwire has FOB farm green peas going for C$10 to $11 per bushel, while yellow peas are in the C$6.75 to $7/bu. range. Compared to prices on July 26, yellow peas are down C50 cents/bu., and green are down C$1 to $1.50/bu.
Kress said it was too early to predict how far prices could drop, but added that it would take something big to stop the downtrend.
"It would have to be a mass issue," she said. "Any localized issues at this point, from a Prairie perspective, are not going to make any difference."
Harvest is underway, she noted, and there aren't any frost concerns for this year's crops.
"I think as far as peas go, we're going to be OK," she said. "We've been travelling the countryside a lot, and there's a good portion of peas that are going to be in the bin by the end of the week, so I really don't think frost is a huge issue."
-- Brandon Logan writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.