WA pulse industry’s ‘massive potential’ challenged by market access, price volatility and shipping issues

WA’s pulse industry has a “massive future” in international markets but will need to navigate price volatility, shipping disruptions and market access to realise its full potential. John Orr — a stalwart of WA’s pulse industry — the lid on the impact global shipping disruptions had on his business and others reliant on exporting through the container market while speaking at the Grain Industry Association of WA Pulse Forum at UWA on June 15. He said a lack of diversity in markets was leading to price volatility and in turn, making pulses a less enticing option for farmers - at the same time shipping issues were causing headaches for exporters. Mr Orr’s business Premium Grain Handlers stores, processes and packs grain into containers for export from Fremantle. It has upcountry sites in Kellerberrin, Brookton and Wandering. Speaking at the GIWA Pulse Forum, Mr Orr said there had been many “variables in the marketplace” during the past two years, with shipping freight costs and market access issues affecting exporters and farmers alike. Mr Orr said at one point, shipping companies were making so much money they “couldn’t be bothered” waiting for backloads – which is the “only way” lower value commodities like grain work. “To get a container into the Middle East (from Fremantle) two years ago would have cost us $US1200. Today, it is $US5000 to $US6000,” Mr Orr said. “Laid on top (of the cost) was the coronavirus problems, where we couldn’t get documents to the banks in India because COVID had decimated the whole logistical chain. “That caused another backlog of freight and the Indian container yards became congested… and then shipping companies didn’t want to go there.” While COVID-19 had caused massive issues in traditional pulse markets like India, the disruption had caused a “massive increase in opportunity for pulses for food” in the Southeast and Northeast Asian region – including China, Korea, Indonesia and Malaysia. “The opportunity in this region for our pulses is massive… and the nice thing throughout this region is that freight is much cheaper – even in difficult times,” he said. “The market volatility we see in the Middle East and South Asia, we are not going to see in East Asia, Southeast Asia and Northeast Asia.” Mr Orr said he hoped the new Federal Government would work to improve access into markets, including China and markets in Asia that presented a “huge opportunity”, but had limited access. “We still can’t get chickpeas into China… but they are buying chickpeas being shipped from Australia to India, and then shipped from India to China,” he said. “If we can go directly into China, where demand (for chickpeas) is going nuts, there is excitement for the future.” Farmers concerned about the “all over the place” nature of pulse prices could mitigate their risk and frustration by investing in on-farm storage to avoid spot selling straight after harvest. Mr Orr encouraged farmers to invest in on-farm storage and have a good relationship with their pulse customer to coordinate the “enormous logistics involved in exporting pulses”. “For chickpeas, for example, if you are selling it just as other (international) crops are coming off, you are not going to find as much demand as just before their crop comes off,” he said. “Faba beans can be a shocker… there are big periods of time where there is no demand apart from at the local stock feed mill… so make sure you have storage available. “Having on-farm storage means that if the price isn’t right, you don’t have to sell straight off the header in a poor market… you could pick up another $100 per tonne in three months’ time.” Australian Export Grains Innovation Centre markets manager Mary Raynes said new and niche feed markets were still the driving force for pulse demand. WA farmers bothered by trade market access, supply chain issues and price volatility have wound back pulse plantings this season with GIWA’s June crop report forecast 38,000ha planted. The figure - 20,000ha of which is in the Esperance Port Zone – is down on the estimated 53,000t planted in WA last year, which produced about 104,000t at harvest.