This week, we continue our coverage of the Australian pulse market by looking at Faba Beans, for which a 50% larger harvest than last year is expected.
The Australian faba bean harvest for this year has been estimated by Pulses Australia to reach 480Kt, (figure 1). The lion’s share of the volume is due to come from higher rainfall areas of SA and VIC, with NSW only accounting for 25% of the expected crop. ABARE’s September-20 predictions are a somewhat more pessimistic, at only 418Kt, an upgrade from June’s forecast of 402Kt.
New crop faba beans have been forecast by Pulses Australia to fetch around $400-50 / tonne, but most will go to stock feed this year, as the export market is experiencing weakness. Egypt, which normally accounts for half of world import demand, is currently not buying in volume. Egypt’s processing and re-export market has reportedly soaked up a lot of old crop faba beans earlier this year, while outdoor markets in the middle east have been closed or limited due to the impact of COVID-19 restrictions. Egypt’s faba bean export ban appears to have expired on 16/09/2020; so this is an area to watch closely over the coming months to see if demand returns.
As with many pulses, aesthetics are an important factor for the faba bean human consumption export market, however, they tend to quickly discolour in storage, making them more suitable for stockfeed.
On the domestic front, EAT groups and Scalzo food’s’ Horsham Australian Plant Proteins manufacturing plant is expected to take in a maximum of only about 20,000 tonnes of faba beans. The plant has announced that it will only run at half capacity for the first 18 months however, so a figure of 10-12,000 tonnes this year seems more likely.
Looking at (figure 2), current prices are tracking at $385-$411 a tonne for new crop fiesta multigrade for the South Australian ports of Port Adelaide, Walleroo and Port Lincoln. Reports from Grains Central have indicated that Wimmera packer and Goondiwindi prices sit at the lower range, of $380-385 /tonne.
Port Adelaide is commanding the highest prices, however, this has slipped $10 in the last week, and down $45 from levels of $466 seen at the end of July, while Port Lincoln comes in at the lower end of the spectrum, with a $25 (6%) discount, at $385, which has been stable since early August.
High prices of $1,100 a ton were realized back in 2018 on the back of strong domestic demand for animal feed due to drought, and a global shortage driven by poor European crops.
Yields have been forecast to be around 2 tonnes per hectare, but faba beans have a lot of pent up potential to produce staggeringly impressive yields, as high as 6 tonnes per hectare, as was demonstrated in recent field trials at Horsham. The good rainfall experienced over August in some of the key growing areas of SA and VIC suggest that the harvest could indeed be a lot bigger than current forecasts suggest.
What does it mean?
The Faba bean market is expected to be oversupplied this year. With a large crop, flat domestic demand and a limited export market on the horizon (due to the absence of Egypt), much of the crop is expected to be utilised by the stockfeed market. Therefore, the price outlook for the humble Faba bean appears to have little upside at the moment.
Key Points
- Expected 479Kt crop for 2020/21.
- Egypt and middle east demand has slackened.
- Horsham protein plant is only small and unlikely to fill the gap with domestic demand.
- Big yields are possible- max faba bean yield is 6t /ha under ideal conditions.
Click on figure to expand
Click on figure to expand
Click on figure to expand
Data sources: Reuters, Profarmer, ABARES, Mecardo
