Blog Details

Market Overview

The lentils market continues to experience dynamic price movements driven by supply challenges and regional disparities. Current bulk shipment prices to Kolkata port are at $690 per ton, with offers slightly higher at $695-697 per ton. For container trade, February-March Jain shipments are quoted at $725-730 per ton, while bids hover around $715 per ton. Global market prices have reached record levels, with some regions reporting values as high as $1,000 per ton.

Production & Supply

Australia

• Production: 1.1 million tonnes (revised down from 1.7 million tonnes)
• Exportable Volume: 900,000-1,000,010 tonnes
• Challenges:
  • Severe soil moisture shortages affecting crop quality
  • 200,000 tonnes of standing crops at risk of downgrade to Grades 2 or 3
  • Significant logistical hurdles, including rolled-over shipments

Canada

• Production: Stable at 1.7-1.8 million tonnes
• Yields: Improved compared to 2023's subpar results
• Pricing: Trading between $720-730 per ton
• Key Factors:
  • Filling the supply gap caused by Australian constraints
  • Effectively managing surplus production despite low-price cargo execution

India

• Government Stock: 800,000 tonnes
• Sowing Reports: Mixed results between government and private traders
• Kolkata Port Premium: Additional $30-40 per ton due to cargo shortages
• Weather Concerns:
  • Delayed winter onset
  • Above-normal temperatures impacting crop conditions

Market Outlook

Price Expectations

• Base Market Prices: Likely to remain at $715-720 per ton, with potential to rise to $740 per ton.
• Kolkata Port Premium: Expected to persist due to cargo constraints.
• Government Stock: Sufficient to bridge supply until new crop arrivals.

Key Risk Factors

1. Australian Quality Concerns: Downgrade risks for standing crops.
2. Logistical Constraints: Delays and shipping bottlenecks in major export regions.
3. Indian Growing Conditions: Unfavorable weather patterns impacting domestic production.
4. Farmer Returns: Declining returns could affect future production capacity.

Trading Strategy

Buying Position

• Secure February-March shipments to ensure supply.
• Monitor Kolkata premium for cost optimization.
• Closely watch Australian shipment quality and implement rigorous inspection protocols.

Trading Position

• Maintain balanced inventory levels to hedge against price volatility.
• Account for quality differences, particularly for Australian cargo.
• Track Indian government stock releases and manage exposure accordingly.
• Use $715-720 per ton as a reference price point while planning for potential shipment delays.

Risk Management

• Quality Control: Implement robust inspection protocols for Australian shipments.
• Logistics Contingencies: Develop plans to mitigate shipment delays.
• Weather Monitoring: Regularly assess weather impacts on Indian crop conditions.
• Logistics Review: Stay updated on freight and shipment constraints in key regions.

“Market conditions are subject to change based on evolving factors. Traders and stakeholders are advised to stay vigilant and proactive in response to market developments.”