Lentil Market Tightens: Supply Pressures Boost Upside Risk

The global lentil market is at a pivotal juncture, with tightening domestic and international supplies fueling the potential for higher prices through the coming quarter. Indian lentil arrivals have dwindled sharply, with over 87% of the domestic crop already disseminated and the small remainder held by farmers for future sowing. Lower yields in key Indian regions—especially Uttar Pradesh, hit by wilt disease—have exacerbated the supply squeeze, reducing marketable quantities and intensifying competition for limited stock. Meanwhile, international supplies from major exporters such as Canada and Australia are also under strain, both due to robust overseas demand and limited carryover inventories. The recent 10% Indian import duty has further complicated the picture, contributing to rising import quotes and a reluctance among bulk exporters to offer discounted cargoes. Consumption continues to outstrip production with India’s annual deficit exceeding 1.2 million metric tonnes, implying persistent dependence on imports at increasingly elevated price points. Collectively, these market forces indicate a low downside risk and substantial upside potential for lentils in the short to medium term. Strategic holding appears prudent, as lentil prices are poised to break higher from today’s already firm platform.

📈 Prices

Type	Origin	Location	Term	Latest Price (EUR/mt)	Weekly Change (%)	Market Sentiment
Red Football	CA	Ottawa	FOB	2.46	0.00	Bullish
Laird, Green	CA	Ottawa	FOB	1.63	0.00	Bullish
Eston Green	CA	Ottawa	FOB	1.50	0.00	Bullish
Small, Green (99.5% org.)	CN	Beijing	FOB	1.39	-1.42	Stable
Small, Green (99.5%)	CN	Beijing	FOB	1.28	-1.54	Stable

🌍 Supply & Demand

• India: Production at 1.6 million mt vs. consumption of 2.8 million mt—a structural deficit of 1.2 million mt. Over 87% of the 2025 crop has already reached mandis; remaining stock is minimal and held for next sowing.
• Major regions: Uttar Pradesh faces tightened supply after wilt disease impacts late-sown areas. Madhya Pradesh and Bihar report declining stocks with old crop largely exhausted.
• Imports: Canadian and Australian lentils now trading at a premium due to increased bids and a recent 10% import duty in India; April–May shipments have jumped from $71.30 to $76.20/quintal, with offers nearing $85.20.
• Global inventory: Most of Canada’s new crop (harvested Sep–Oct) is already sold. Limited carryover in both Canada and Australia projects continued tight international stocks.

📊 Fundamentals

• Yield: Downward trend in major Indian producing regions as adverse weather and disease (wilt) reduce potential output.
• Speculative positioning: Minimal short positions with strong fundamental support—market is largely held by physicals/longs.
• Import Duties: Recent 10% Indian import duty supports firm pricing and restricts discounted large-volume trade flows.

🌦️ Weather & Crop Outlook

• India: Most of the crop already harvested; focus shifts to monsoon onset and its implications for next sowing. Current weather is neutral for stocks but critical for farmer sentiment.
• Canada/Australia: Recent reports indicate generally favorable weather for seeding but concerns over pockets of dryness in key Canadian provinces could impact yields if extended. Monitoring July rainfall outlook is recommended.

🌏 Production & Global Stocks

Country	2024/25 Production Estimate (mt)	Stocks (mt)	Consumption (mt)	Comment
India	1,600,000	Low	2,800,000	Declining output; large deficit
Canada	2,800,000	Tight	1,000,000*	Stocks nearly exhausted, small new-crop available
Australia	1,060,000	Low	390,000*	Heavy forward sales
Turkey	360,000	Low	220,000*	Minor exporter; stocks thin

*Estimated exportable surplus

📆 Trading Outlook & Recommendations

• Buy on pullbacks—Limited supply downside, strong upside potential as import price impulses reach markets.
• Monitor Canada/Australia weather—Further dryness could enlarge the global deficit and rally prices further.
• Indian policy risk—Watch for changes to import duties or government imports; could temporarily relieve pressure.
• Physical coverage recommended—End users should secure requirements for the next quarter promptly.

⏩ 3-Day Regional Price Forecast

Exchange/Market	Current Price (USD/quintal)	3-Day Forecast (USD/quintal)	Direction
India (Billing, spot)	81.00	83.50–85.20	⬆️
Mundra Port (Import)	74.60–74.76	76.20–80.00	⬆️
Canada (FOB, Red Football)	2.46 (EUR/mt)	2.50–2.55 (EUR/mt)	⬆️