Chickpea markets remained relatively quiet in the first week of December. In India, the fundamentals are still painting a bearish outlook for Desi Chickpeas. As per the latest data by the Indian Ministry of Agriculture, the total planted area of Chickpeas increased by 8% from last year in the same period, at 84.37 lakh hectares ( 8.437 million hectares). This is due to higher prices of Chickpeas in the local Indian market. In an effort to support local farmers, the Indian Government increased the Minimum Support Price (MSP) to 4200 rupee per 100kg (up 8%) which has encouraged the cultivation of the Chickpea crop. On the basis of larger sowing areas, traders are expecting a bumper Indian chickpea harvest in March/April.
Globally, the world Desi Chickpea production is forecast at 11.3 million metric tonnes in 2017. Up 17% from the previous year. Due mainly to the planted area increase in India.
Australia’s chickpea is excellent for filling in excess demand. As we saw in 2015 and 2016, when the world production dropped below 10 million metric tonnes due to two consecutive Indian drought crops, our export program hit record numbers. This also implies that Australia’s chickpea export program has a heavy reliance on world supply. In the coming season, our export program will be challenged by the forecasted burdensome world supply. There would need to be some catastrophic weather events in India over the next couple of months before we see any signification increase in export numbers and potentially better price.
Since Australia is heavily relying on export demand to push higher prices, lower exports forecast is putting prices under pressure, as we have seen in the past two months. Based on trade figures, an average price of AUD$817 /mt Free-In-Store (FIS) Sydney in the months of Oct/Nov 2017. Down AUD$134 /mt from the peak average from Oct 16 – Sep 2017. Lowest average in six years was AUD$456/mt in 2014. Last six year average is sitting at AUD$673 /mt.