Smaller World Lentil Crop

WINNIPEG - May 12/06 - SNS -- World lentil production could drop to around 3.46 million metric tons (MT) in 2006-07, down 17% from the current marketing year, believes Agriculture Canada.

Lower production in Canada is seen as the main cause for the decline and will see that country's share of world output sink from 31% in 2005-06 to just 18%, says Stan Skrypetz, Pulse and Special Crops Analyst, Market Analysis Division, Agriculture Canada.

World supply is forecast to decrease by only 6% to 4.36 million MT, as higher carry-in stocks offset most of the decrease in production. Canada share of world supply is expected to decrease to 28% from 33% in 2005-06. Total world use is forecast to increase, while carry-out stocks fall sharply.

Skrypetz based his forecasts on the Statistics Canada seeding intentions estimates. They predict lentil area in Canada could plunge 40% from 2.16 million to 1.3 million acres this year. According to analysts at STAT Market Research, Canada's lentil trade believes the decline will be closer to 20% for a 1.7 million acre crop.

Focusing on the Statistics Canada numbers, Skrypetz said, "The sharp decrease in expected seeded area is due to historically low prices and high carry-in stocks for green lentils. Since the survey was conducted during March 17-31, 2006, the actual seeded area may differ from the intentions due to changes in the market outlook and expected prices, and producer reaction to the seeding intentions report."

Assuming normal precipitation for the growing and harvest periods, and the resulting normal abandonment and trend yields, production is expected to decrease by 51% from 2005-06 to 625,000 MT. In 2005-06, average yields were significantly above trend.

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