Fewer chickpeas means cheap protein and hummus could be harder to find

[July 06, 2022]  By P.J. Huffstutter and Christopher Walljasper

CHICAGO (Reuters) - It's not a great time to be a hummus fan.

Global supplies of chickpeas, the main ingredient, could dip as much as 20% this year, according to data from the Global Pulse Confederation. Weather and war have hurt supplies of the protein-packed bean, driving up food prices and creating headaches for food manufacturers.

Chickpeas are made into hummus, flour, soups, stews and curries. While they are growing in popularity in the United States, they have long been key to the diets of people in India and the Middle East - places that are already struggling to cover rising costs of food imports.

Farmers in the United States - the No. 4 chickpea exporter - planted fewer chickpeas this year as poor weather bogged down spring planting and they prioritized more lucrative commodity crops like wheat and corn, government data shows.

Meanwhile, top buyers from South Asia and the Mediterranean are trying to scoop up dwindling U.S. stocks as supplies shrink worldwide and as the war between Russia and Ukraine - both producers of chickpeas - exacerbates disruptions to global supply chains.

"When the Russia-Ukraine war broke out, the demand boomed," said Jeff Van Pevenage, chief executive officer of Columbia Grain International, grain and pulse merchandiser and supplier, headquartered in Portland, Oregon. "We saw strong demand from China, then it was calls from customers in Pakistan and Bangladesh."

Ukraine could not seed its total chickpea crop due to the war, removing 50,000 tonnes normally bound for Europe, said Navneet Singh Chhabra, director of Shree Sheela International, a global chickpea trader and brokerage firm.

Sanctions aimed at cutting Russia's access to the global financial system have also hampered purchases of its agricultural products, he said, as some buyers seek to avoid complications with payment. A top chickpea exporter, Russia normally accounts for about 25% of global trade, he said.

"Russia is exporting around 200,000 to 250,000 tonnes, minimum, per year. When the war started in February, the supply was destroyed, totally," he said.

Transportation problems have exacerbated supply constraints and added to rising prices, particularly in the United States.

Ocean vessel backlogs in the Pacific Northwest have forced some grain merchants to ship chickpea containers by railcar thousands of miles, taking more expensive and circuitous routes to fulfill orders.

Columbia Grain International usually exports some of its chickpeas by ocean vessel through the Pacific Northwest. But as West Coast ports were snarled up, Columbia Grain last fall started sending chickpeas by rail to Houston, Texas, in search of available ocean transport - nearly doubling shipping costs, Van Pevenage said.

As overburdened train lines also backed up, those chickpeas arrived at the port long after the ships sailed.

"We've had product sitting in Houston for eight weeks, waiting for an outbound vessel," Van Pevenage said.

Columbia Grain is now considering shipping to Charleston, South Carolina, Van Pevenage said.

North Dakota farmer Kim Saueressig decided not to plant chickpeas on his drought-parched fields last year. Known as a pulse, or grain legume harvested for its protein-rich seeds, chickpeas are also prone to disease that can require costly fungicides, he said.

A mound of chickpeas is seen as they are packaged to sell at a wholesale market in Karachi February 21, 2010. REUTERS/Akhtar Soomro

"Prices are still pretty good, but it's a headache trying to deal with them," Saueressig said.

Tight supplies have helped push U.S. retail prices higher. Chickpeas on U.S. grocery shelves jumped 12% from last year, nearly 17% higher than prior to the pandemic, according to the most recent NielsenIQ data. Hummus prices have increased 6.9% since 2019.

Hummus maker Sabra Dipping Company is keeping ample supplies on hand "to safeguard against the unexpected," Chief Executive Joey Bergstein told Reuters.

The company wrestled with production disruptions during a plant upgrade this year in Chesterfield County, Virginia, which had customers sending out a barrage of complaints on Twitter and Facebook about hummus shortages.

GLOBAL DEMAND

Global demand is outstripping supplies, according to trade data and Shree Sheela International's research. Turkey issued an export ban, while yields in Mexico shrank due to weather woes.

In Australia, a top chickpea exporter, farmers contended with flooded fields, while sellers scrambled to secure container space on ocean freight vessels.

Some farmers may replant, said Ole Houe, director of advisory services at agriculture brokerage IKON Commodities in Sydney.

"Parts of the planted area is still under water," said Houe, who noted that Australia exports chickpeas mainly to top consuming markets India, Bangladesh and Pakistan.

In the United States, farmers planted nearly 5% fewer acres of chickpeas this year, the Agriculture Department reported.

The U.S. market already struggled with smaller stockpiles after last year's production was cut by a third due to devastating drought from North Dakota to Washington state. Total domestic supplies are down 10.5% as of June 1, from a year earlier, according to USDA data.

Still, Montana farmer Ryan Bogar is gambling that the shortage may pay off for the 1,500 acres of chickpeas his family planted this spring. Chickpeas need less fertilizer than corn, he said, and can sell for twice as much as wheat, he said.

Wheat prices hit a near record in March, but have recently fallen to pre-Ukraine war levels as fears of recession around the world hamper commodity markets.

"Wheat will pay the bills. But if you want to buy new equipment or have money to expand, you better have some peas in the mix," Bogar said.

(Reporting by P.J. Huffstutter and Christopher Walljasper in Chicago; Additional reporting by Naveen Thukral in Singapore and Rajendra Jadhav in Mumbai; Editing by Caroline Stauffer and Matthew Lewis)

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