A supply glut reduces prices … and a 25% reduction in demand
The importer is at its lowest levels … and demands to reopen the door for export
The production of the baladi beans crop begins in mid-April, amid a sharp decline in selling prices, driven by the increase in the supply of local and imported crops, and the decline in purchasing power among restaurants and individuals.
According to current market indicators, the prices of baladi beans have declined in recent weeks to weak levels below the real cost of production, ranging between 10 and 11 thousand pounds per ton, to closely match the prices of imported products united in the markets.
Obour Al-Attar, deputy head of the Agricultural Crops Division at the Cairo Chamber of Commerce, said that bean prices have witnessed successive declines over the past year.
He pointed out that the prices of beans from imported and local products will decrease, and the markets are awaiting the emergence of the local crop from the new season, and he expected that it would have more negative effects on the sales prices of the decline.
He pointed out that farmers have been affected by faba beans during the last year due to the suspension of exports, and although this protected price stability, the abundance of supply affected the local producer.
He added: The market has been going through an exceptional circumstance since the beginning of the Coronavirus outbreak, and the Ministry of Industry has banned the export of beans to protect the market from large price increases, as well as ensuring an abundance of stocks of strategic commodities, of which beans are one of them.
He said: “The damage caused to farmers last year needs a review of the decision to reduce the burden on them this year, through the return of exports again, as the damage to farmers for the second year in a row, and the high quantities and low prices to low levels are all reasons that push the farmer to refrain from farming.
He pointed out that the average price of imported beans currently ranges between 6,500 and 7,500 pounds per ton, and the average price of baladi beans is 11.5 thousand pounds per ton.
He added: Over the last 3 months, the prices of beans witnessed a remarkable decline, the imported beans decreased in the last 30 days by values between 1000 and 1500 pounds per ton, and the baladi beans decreased to 1500 and 2000 pounds per ton.
The prices of imported beans were at the beginning of the introduction of the last local season’s crop at 9.25 thousand pounds per ton compared to 10.5 thousand pounds per ton immediately before it, and English beans at 7000 and 8000 pounds per ton compared to 9.5 and 11 thousand pounds just before it, and with the current season the decline increases driven by the abundance of supply.
He added: The year before last, the prices of the municipal product rose to 35 thousand pounds per ton, coinciding with the decline in global production and drought in Europe and the bean producing countries such as Australia and England.
He explained that the fair price that the beans must have so that the market does not cause losses to farmers, must not be less than 20 thousand pounds per ton of baladi fava beans.
He said that the price of imported beans is determined by the global market in terms of the annual production volume and the form of demand, and comprehensive statistics must be prepared for the quantities available in the market of the new crop, and accordingly, the export decision is made and the quantities shipped abroad are rationalized.
Ammar Mohamed, Secretary of the Agricultural Crops Division at the Cairo Chamber of Commerce, indicated that the volume of demand has shrunk in the current period by about 25%, compared to the same period last year, driven by the decline in restaurant orders and the decline in consumer purchasing power.
He explained that the prices of beans over the past months have declined several times, driven by an increase in supply and a decline in demand in light of the outbreak of the Corona virus, and that the prices of both domestic and imported beans are expected to decline during the coming period, with the introduction of the fava bean crop in the new season in mid-April.
According to official data from the Ministry of Agriculture, the area of cultivation of the baladi fava bean crop has expanded by 4.1% in the current season to reach 125,000 feddans compared to 120,000 feddans the previous season, and the expected production volume is about 190,000 tons compared to 180,000 tons the previous season, with an average of 10 ardebs per feddan.
Domestic production represents about 15% on average of the total volume of domestic needs for faba beans annually, which exceed 800 thousand tons annually.
The article What is the fate of “Baladi beans” in the new season? It was written in the Stock Exchange newspaper.