Debate Over Canadian Domestic Feed Peas

VANCOUVER - Jun 9/06 - SNS -- Feed pea markets ended the week little changed in local currency terms, but the strength of the U.S. dollar versus other currencies forced prices lower in U.S. dollar terms in major market locations.

Canadian exporters remain optimistic of a strong finish to the 2005-06 season with respect to shipments to Spain; but a recovery in crop production levels in that country is expected to result in a steep decline in demand for the 2006-07 marketing year.

That will refocus attention on the North American domestic markets. Statistics Canada's stocks in all positions report for March 31 painted a disturbing demand picture for Canadian feed peas, with inferred domestic disappearance in the August through March period sinking from 630,133 metric tons (MT) in 2004-05 to just 290,091 MT this season.

Inferred domestic demand is the difference between last summer's carry in plus last year's harvest minus official exports and minus the March 31 stocks in all positions estimate.

Low inferred domestic consumption can only result from one of the following conditions: the carry in and/or last year's harvest estimates are too small, on-farm stocks are too high, and/or domestic demand is down. Exports are the most accurate usage number available and, if changed in the future, is more likely to be increased.

U.S. imports do not appear to be a factor. In the August through April period they total 42,772 MT, including 20,053 MT of green peas, 8,331 MT of yellow peas, 400 MT of splits, and 13,988 MT of peas, not elsewhere specified.

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