India, Turkey hiccups boost pulse import demand

Weather setbacks in two major pulse-consuming countries, India and Turkey, is spurring imports from Canada, Alliance Grain Traders said, as it unveiled better-than-expected earnings, sending its shares to a three-year high.

The pulses-to-pasta group said that importers are believed to be taking in from Australia, Canada and the US "significant volumes" of lentils, of which prices are proving "relatively stable to higher".

For Canadian lentils, buyers in the Indian sub-continent and Turkey "continue to be leading destinations", showing rising volumes, contrasting with small declines to some other destinations.

The trend appears to show "that these core production and consumption markets may be covering short supply positions", reflecting "inadequate production for both domestic use and regional supply", Canada-based Alliance Grain Traders said.

'Impaired production'

"It appears to management that buyers are looking to avoid short supply," the group said, highlighted "impaired" production both in Turkey, where crop production has been hurt by drought, besides in India, where monsoon rains are coming in short.

And this at a time when India has become a structural importer of pulses, and "continues to import significant large quantities of Canadian lentils to fill demand requirements resulting from inadequate production levels".

"Local production is expected to continue to be impaired in the upcoming planting seasons, which may result in increases in imports once again in the period after local Indian production has been consumed by the market," Alliance Grain Traders said.

The India Meteorological Department on Tuesday estimated India's monsoon rains this year at 87% of the average, below an initial forecast of 93%.

The department forecast rains averaging 95% of normal in the second half of the season, which lasts from June to September, after a figure of 82% so far.

Shares soar

Alliance Grain Traders' comments came as the group unveiled an 80% rise to Can$8.81m in underlying earnings for the April-to-June period, on revenues up 15.6% at Can$359.8m.

Results were boosted by increased volumes handled, largely in Canada and Turkey, where the group received a boost from selling supplies received late in the January-to-March quarter.

A deal with Cargill for selling flours, ingredients and starches from pulses also "appears to be providing the intended platform for growth", the group said.

The group's earnings equated to Can$0.44 per share, above the Can$0.24 per share that analysts had expected, helping the stock soar 11.9% to Can$24.24 in early deals in Toronto, the highest since August 2011.

The stock eased somewhat to stand at Can$23.23 in afternoon deals, a gain of 7.2%.

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