Lentils steady but upside risk grows as Australian chickpea crop slumps

Lentil prices are currently stable to slightly softer, but the sharp 52% drop in Australia’s chickpea (chana) crop and firm Indian festival demand point to growing upside risk into Q4. The near-term lentil complex is dominated by weak grower selling in Canada, record-high lentil output in Australia, and softening green lentil values against comparatively firmer reds. At the same time, India faces tightness in chana supplies, limited Tanzanian imports and higher CNF offers out of Australia, all of which can pull demand toward other pulses later in the season. For now, international lentil prices are consolidating after earlier declines, but the combination of tightening desi chickpea availability and strong South Asian festival demand suggests that downside in lentils is increasingly limited.

Prices

FOB Canada quotes in EUR (approximate, ex-CA border, converted from recent CAD/US¢ levels) show mostly sideways moves over the last three weeks, with a mild softening in greens and firmer tone in reds:

Recent market intelligence from Western Canada confirms this structure: large and small green lentils trading in the low‑20s US¢/lb range while red lentils hold in the mid‑20s US¢/lb, with red bids even improving modestly as harvest lags the average pace. 

Supply & Demand

On the pulse complex side, India’s chana (desi chickpea) segment is pivotal. Imported chana stocks at Indian ports are estimated near 175,000 t, with Tanzanian arrivals limited and Australian new‑crop offers for Sep–Oct at about 690 USD/t CNF and Nov–Dec around 705 USD/t CNF, both above Tanzanian levels around 685 USD/t CNF. Festival‑season demand and these higher import costs are expected to lend renewed firmness to chana after the current correction.

Australia’s 2026/27 chickpea crop is forecast to fall roughly 52% year-on-year to just over 1.0 mln t, driven by reduced area and lower yields in northern New South Wales and Queensland.  This sharp contraction in desi chickpea supply tightens the broader South Asian pulse balance and can indirectly support lentils if substitution intensifies in India and neighbouring markets.

In contrast, Australia’s lentil production is projected to rise about 5% to a second consecutive record near 2.3 mln t in 2026/27, more than double the 10‑year average, on continued area expansion and excellent conditions in South Australia and Victoria.  High carryover stocks from the previous bumper crop and sluggish export sales have contributed to a softer global lentil tone since mid‑year, especially for green types, even as chickpeas tighten.

Canada remains the key exporter and is currently working through sizable stocks. Market reports indicate green lentil prices easing on ample availability, while red lentils are supported by stronger nearby demand and slower farmer selling.  Globally, lentil demand is steady, but price-sensitive buyers in South Asia and MENA are taking advantage of the current softness in greens while watching chickpea/chana developments closely.

Fundamentals & Weather

Globally, pulse acreage data for North America suggest a moderate decline in overall pulse area but a relatively better retention of lentil acres versus some other pulses in the US.  Meanwhile, Canada’s role as the dominant exporter is reinforced by robust 2024–26 production growth, though farmgate prices trended lower during 2025–26 before stabilising this season. 

In Australia, the Bureau of Meteorology’s latest outlook points to elevated odds of below‑normal spring rainfall in parts of South Australia, but so far winter conditions have been largely favourable for lentils in SA and Victoria.  Any late‑spring heat or moisture stress could trim yield potential but is unlikely to reverse the record‑crop narrative unless conditions deteriorate sharply.

In India, the monsoon’s progression and kharif crop development will be watched closely. Domestic pulses body statements already flag firm chana prices into the festival window on limited imports, tight stockist selling and the smaller Australian crop.  A stronger chana market raises the floor under substitute pulses, including lentils, particularly for import-dependent buyers.

Short-Term Outlook & Trading Ideas

Given the combination of record Australian lentil supply, heavy Canadian stocks and tightening chickpea availability, the risk balance for lentils is shifting from bearish toward more neutral to mildly supportive into late Q4.

• Importers / European & MENA buyers: Use current flat-to-soft green lentil prices (Canada & China) to extend coverage into Q1 2027. Focus on large greens (Laird) where discounts vs reds are widest, but avoid over‑stocking in view of record Australian supply.
• Indian and South Asian buyers: Monitor chana price strength and CNF offers from Australia closely. If chana firmness accelerates with festivals, consider opportunistic substitution into lentils, especially where Canadian greens are attractively priced against desi chickpeas.
• Producers (Canada): With red lentils showing a firmer bias and harvest behind average, gradually scale in sales on strength while being more patient on greens, particularly for higher-quality parcels that could attract premiums later in the season. 
• Producers (Australia): Record lentil output and softer prices imply limited upside unless weather disappoints or Indian demand accelerates. Consider forward sales on any post‑harvest rallies driven by chickpea‑related sentiment.

3‑Day Directional Outlook (EUR-based)

• Canada (FOB, all lentil types): Sideways to mildly firm; red lentils biased higher, greens broadly stable in EUR terms.
• Australia (export quotes, lentils): Slight downward pressure in EUR as harvest pressure and record crop expectations outweigh support from firm chickpeas.
• India (CIF/CNF-equivalent for imported lentils): Stable to slightly firmer in EUR, tracking stronger chana sentiment and higher CNF offers for chickpeas and lentils from Australia.