Historically, Ukraine is not a rockstar of peas market, herewith, it reserved its place in the TOP-8 world producers (about 6% in 2021/22) and TOP-6 world exporters of this crop (about 6% could be in 2021/22). The giant world producer of peas is Canada (over 40%), followed by Russia (~25%), EU (~25%) and China. Main exporters are Canada, Russia, the EU and Ukraine. As most market participants know about the latest support to grain prices by Canadian factor, here we see the same trend. Drought is expected to cut Canadian peas crop 2021/22 by ~14$ y/y to 4 MMT. Thus, prices are expected to be supported. Herewith, Europe, which is #1 destination for Ukrainian peas, has better crop this year. Season is expected to be challenging.
Christina Serebryakova
Head of Analytical Department
Agricultural Commodities Broker
Ukraine: no reason for new record acreage in the absence of India?
Ukraine faced a record peas acreage n 2017/18 MY. In 2018, India imposed import duty on peas, which pressed prices and made this crop not so attractive for Ukrainian farmers. Herewith, in 2018, peas acreage was anyway still at the level of 400 KHA. While in 2019, dry weather during planting period pushed the peas acreage down to 250 KHA. So far, as exports if peas to India is restricted, there seems no reason for expanding of the acreage to new highs.
Peas location close to ports
Major producing areas of Ukrainian peas are located close to the ports. As most of Ukrainian peas is produced in Zaporozhie, 50% of export is going through the shallow ports of Berdyansk and Mariupol, located close.
Export targets: the EU vs. India
During the last 5 years, about 80% of Ukrainian peas is going for export. Half of all exportable volume is going outside the country in vessels, and exactly these peas will be under our attention in this article. Main peas destinations in vessels in 2019/20 were Spain, Italy, India and Turkey. In 2020/21 Ukraine lost India as destination, but luckily found the replacement for it – the Netherlands.
The share of the EU in the total export from Ukrainian peas in 2020/21 raised to 52% vs. 41% in 2019/20. At the same time, supplies to India in 2020/21 were zero, after decrease of the previous 3 seasons (376 KMT in 2017/18 or 43%, 118 KMT in 18/19 or 17%, 55 KMT in 2019/20 or 13%). Peas exports to India completely stopped since January 2020.
Indian MOViE
On 25 April, 2018, India announced about the ban on peas imports for a three-month period, a downward price dynamics started dominating on the Ukrainian export market (prices dropped by about 500 UAH next day (~$18-20). Then, there was a temporary permission to import to India, which led to price rise for peas by $50/MT per day.
As per FAO stat, India produces about 500-600 KMT of peas per year, while consumption was more than 3 MMT in 2018/19. As was noted by RitaBuyse, the expert of the pulses market, “Due to restrictions the consumption shifted to Desi Chickpeas and reduced to 1.5 MMT. There's no current import quota for peas, although it is still a restricted item. But there's strong rumors that India may open pea import soon to control prices of pulses”.
Taking into account that the EU is having better peas crop in 2021/22, this season sounds to be challenging for Ukrainian exporters. Line up in ports shows during July-August 2021/22 Ukraine exported 72 KMT of peas via vessels vs. 111 KMT same time last season. Prices bite, importers donot hurry.
