Lentils are a tough one at present. They are still under the spectre of import tariffs into India, but prices have been rising in recent months. A lot of this is due to speculation that India will reduce their import tariffs due to concerns that their crop is lower than official government estimates.
India did provide some rate relief last year (see ‘Tariff timing is everything’), and fingers crossed that they do the same again in 2021.
So whilst not to the heady days of recent years, still a very attractive price. The majority of the countries lentil crop is grown in South Australia and Victoria, in areas that haven’t had the best start in recent years.
The lentil acreage is set to increase this year, with the area up 11%. A lower yield expectation has the crop at 588kmt, versus 634kmt last year. The crop based on this forecast would still be the third-largest crop on record.
At the moment our main competitor in the lentil space (Canada) has reduced their lentil acreage for this year. It is interesting to note the close relationship between lentil acreage in Australia and our commonwealth cousins.
Pricing is very strong and could see improvements if India rescinds their import tariff.