Further Chickpea Price Gains Could Come Later

Prairie producers may have to wait a bit longer to see further gains in chickpea prices.

With buyers generally well stocked with supplies in the nearer-term, it could be winter or early spring before those stocks are depleted and purchasers need to step back into the market, said Colin Young, manager of Mid-West Grain Ltd. in Moose Jaw.

“The buyers - in the face of escalating prices - are choosing to wait to consume their carryover stock and hope they can purchase something cheaper to carry them through,” he said. “If the market is going to move, it’s going to be between December and March. That window should see destination stocks depleted and then needing to repurchase, more willing to pay a higher price because they don’t have cheaper inventory in hand.”

Although Prairie chickpea prices have risen due to this year’s drought and lower production, the gains have not been as strong as for other crops, mainly because record high prices in 2017 and 2018 coaxed significantly more acres into the ground and resulted in heavier carryovers. For 2021-22, Agriculture Canada is projecting domestic ending stocks of 155,000 tonnes, way down from 280,000 a year earlier but still representing a hefty stocks-to-use ratio of 66%.

Prairie prices for 10mm Kabuli chickpeas are currently hovering around 58 cents/lb. Despite some softening over the past month, that is up sharply from a year earlier but still below the most recent highs of about 75 cents back in the fall of 2018.

Amid drought and smaller planted and harvested area, Canadian chickpea production this year was estimated by Statistics Canada in September at 64,000 tonnes, versus 214,000 in 2020. Exports are projected at 150,000 tonnes, unchanged from 2020-21.

Despite varying yields in the primary production province of Saskatchewan, Young. said there were some bright spots, most notably the quality of the crop.

“Quality in drought conditions tends to be excellent. So what we’ve produced was a small crop of small caliber, high quality chickpeas. Very, very light supply and very good quality.”