Global demand for Russian peas has rised significantly

Over the first half of the current season, the peas export from the Russian Federation exceeded the export volumes for the whole previous agriculture year
Russian peas were in demand in the global market during the first half of the 2021/22 season against the backdrop of a fall in the harvest in the leading producing countries and an increase in the gross harvest in our country. Olga Grab, Black Sea region agricultural markets analyst with Refinitiv told Agroinvestor. According to her, exporters are attracted by the absence of duties for this agricultural crop export. "High global demand opens up new opportunities for Russian farmers and increases competition between exporters and processing companies in the short term," she says.

According to Refinitiv, peas represent one of the main Russian agricultural exports item in the 2021/22 season, along with wheat, barley and corn. Its supplies in July-December 2021 exceeded exports for the whole 2020/21 season and amounted to 510 thousand tons. At the same time, shipments slowed down in November. Amid high demand and attractive prices, farmers have already sold a significant portion of the 2021 harvest.

The growth of Russian peas shipments was also boosted by an increase in global interest towards meat substitutes. Traditional peas consumers as well as the producers of vegetable protein, faced a shortage of this crop, noted Olga Grab.

Pea harvest in Russia has been steadily rising since 2018. According to the Russian statistics Service, its share in the legumes output grew from 71% in 2018 to 79.5% in 2020. The final data on the 2021 harvest is not yet available, but growth is expected, Olga Grab noted. Since 2017, pea crops in our country have increased by 54% to reach 1.45 million hectares for the 2021 harvest. In the 2021 crop structure, peas accounted for 1.8% compared to 1.2% in 2017. The traditional pea growing regions are the South region, the North Caucasus and the Volga region.

Russian farmers planting peas have a chance to save on the means of production, since legumes need less nitrogen fertilizer than other types of agricultural crops, said Grab.

According to the International Trade Center (ITC), global exports of dried peas in 2020 grew by more than 6%, to 6.7 Mt, compared to 2019. Russia is steadily ranked second among the global peas suppliers after Canada. In 2020, the share of Russia in the global dried peas export in monetary terms was 8%.

Export shipments of peas from Russia this season, according to Refinitiv, are made by small-tonnage vessels directly to buyers and through offshore transshipment to Bangladesh, Venezuela, Egypt, Turkey, and EU countries. "Bangladesh and Pakistan are the world's largest peas importers, and China is the absolute champion in this crop import. The China's share in world imports of peas in 2020 was 42%, Bangladesh - 9%, Pakistan - 7%, says Olga Grab. "Imports of India, one of the world’s largest consumers, dropped 38 times from 2017 to 2020, to 98,000 tons, according to ITC."

According to the USDA estimates, Chinese imports of dried peas, where they are used as a source of protein in feed rations, will keep on getting to new highs. The shipment volumes in 2015/16-2020/21 MY can grow by 3.6 times, up to 3.1 Mt. In the 2020/21 season, Canada was the largest supplier of dried peas to China with a 93% share. "Capabilities for growth in pea production in Russia and active work on phytosanitary agreements for the access of Russian agricultural products to the Chinese market challenges the leading Chinese import market suppliers, given the rapidly growing Chinese demand," says Olga Grab.

"In developed countries, consumers have been paying more attention to the impact of food production on the environment, given the global problem of climate change," notes the Refinitiv analyst. — According to Markets and Markets research firm, the global pea protein market could grow from $745 million to $1.4 billion between 2020 and 2025. Such global trends provide an opportunity to increase Russian production and export of peas as a raw material. The inclusion of Russia in the global process of production and consumption of alternative protein sources is inevitable, according to Grab.

Russian entrepreneurs have recently been showing active interest towards processing of vegetable raw materials: some companies have announced plans to build facilities for the deep processing of peas for the production of food, sports formulas, and feed products. The launch of the new products manufacture is scheduled for 2023. The first enterprises plan to process a total of up to 400 thousand tons of peas per year with the scale up possibility, Refinitiv analysts calculated.

Prepared by Specialized Accounting Center in the Agricultural Sector FSBI based on agroinvestor.ru materials
Source: specagro.ru.