Food Grade Peas Face Burgeoning Supply

VANCOUVER - Feb 3/06 - SNS -- World supplies of field peas will be up in 2006-07, predicts Agriculture Canada, in the face of bigger harvests in the United States and Europe.

"World dry pea production is forecast to increase by 3%, from 2005-06, to 11.74 million metric tons," Agriculture Canada's Stan Skrypetz said in a review of markets. "Although EU seeded area is expected to decrease because of a shift to rapeseed planting, average yields are expected to recover from the drought reduced low levels in 2005-06, resulting in higher production.

"In the US, seeded area is forecast to increase by a third due to higher expected net returns than for many alternative crops, resulting mainly from the high loan deficiency payments or market loan gains received by dry pea producers."

Agriculture Canada maintains its view that Canadian field pea area could rise 6% this year, but believes a return to average yields would actually result in a smaller crop. While the industry generally expects little change in field pea area in Canada this year, there is not widespread support for the notion of a 6% increase.

While field pea movement has been good and returns are deemed competitive with grains, grower prices are near their historic lows for the commodity and the outlook for wheat is becoming increasingly positive. Wheat was helped by an end to India's seven year absence as a buyer, with its decision this week to import 500,000 MT -- a quantity some analysts in the country argue is inadequate to cover shortfalls from local harvest.

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