Alberta has a huge opportunity in the pulse sector — and that’s just to meet demand already out there.
That was only part of the good-news message that Murad Al-Katib brought to this year’s FarmTech.
The future looks even brighter, said the president and CEO of AGT Foods in Regina.
“Meeting the demand and supply fundamental trend is something you guys are going to have a tremendous opportunity to monetize,” said Al-Katib, who started what is now the world’s largest lentil-processing company with Turkey’s Arslan family in 1997. “I’m a big believer that the protein requirement of the world is going to drive incomes here and abroad.”
Al-Katib praised Alberta Pulse Growers and other Canadian pulse associations for providing “a tremendous amount of leadership,” particularly for moving the industry beyond being just a supplier of commodities.
Last month, Pulse Canada announced its “25 by 2025” goal of finding new uses for up to 25 per cent of the industry’s production by the year 2025. It cited snack foods, tortillas, and breakfast cereals as just a few product categories with major growth potential for pulse ingredients such as protein, fibre, and slowly digestible starch.
Al-Katib pointed to pea protein, isolates, concentrates, and flours as examples of food ingredients that will provide steady markets and help shield growers from roller-coaster price swings that are hallmarks of most agricultural commodities.
“Fundamentally, as we move up the chain, the food sector gives us an opportunity to boost the demand,” said Al-Katib, whose company sells more than $1.7 billion worth of pulses annually. “Even with global economic tension, we will insulate ourselves from that.”
Alberta has a number of advantages when it comes to pulses, he added. These include being closer to salt water and markets in the Asia-Pacific region, and being able to grow every single type of pulse in the southern part of the province.
He noted Alberta was the second-largest producer of lentils in the world in 2016, surpassed only by Saskatchewan. As well, Alberta and Montana are the only two regions that can increase their pulse acreage and Albertans are far ahead of Montana growers, said Al-Katib. Alberta also has the advantage of an earlier harvest than other regions.
“You guys are in a unique position from a container perspective, too,” he said. “You actually have a large number of container imports coming into Edmonton and Calgary. In Saskatchewan, we’re starving for containers. Here you’re in a surplus position.”
Drought in India sent pulse prices to record highs last year, but they’ve since fallen — both because of timely monsoons and increased export supply.
But demand will continue to rise in the world’s biggest market for pulses, said Al-Katib.
As incomes rise, consumers are shifting to more protein consumption, and there is currently a six-million-tonne gap between supply and demand in India, he said.
And while India, the North African subcontinent, and the Middle East continue to drive pulse demand, North America, western Europe and Asia are rapidly growing markets for high-protein, high-fibre, and high-micronutrient ingredients with a good environmental profile. Al-Katib also said he sees big opportunities in the pet food and aquaculture sectors, along with food ingredients. Companies are creating new food products such as baked lentil chips, and blending pulses with cereals to create reformulated pastas. These blended pastas have a more digestible protein fibre, and a smaller carbon footprint than regular ones.
And Prairie producers have shown they are up to the task of meeting that additional demand.
“The big crop that we had in 2013 — that’s not a blip,” said Al-Katib. “Fundamentally, agronomy is advanced, farming practices have advanced, and yields have advanced.”
Moving the crop
But the entire supply chain needs to prepare for the logistics of bigger crops and invest in on-farm storage, rail infrastructure, and port infrastructure, and also needs to make use of all freight corridors.
Canada’s grain-handling system is extremely complex, which is a disadvantage when compared with countries like Australia.
“One of the things people have been talking about is surge capacity and infrastructure,” said Al-Katib, part of a panel that recently conducted an in-depth review of the Canadian Transportation Act.
“One thing I would like regulators to know is that farmers have actually done their part.”
Producers have invested heavily in storage and can now store 40 million tonnes on their farms. That is key in both handling bumper crops and being able to feed supply chains.
“You actually allow us as grain processors and handlers to feed our factories throughout the year,” he said, adding producers need to bear that in mind in their marketing strategy.
“Producers — you’re not going to be able to market all of your grain in four months of the year. Ultimately, we have to do a better job as a country of marketing to all the windows and all the shipping periods and all the ports to be able to ensure that when we get to 70 million tonnes, we can move the crop.”
That includes the Port of Prince Rupert, which offers a tremendous business opportunity for producers in the Peace region, he said.
Working together to create a unified supply chain is worth the effort because the opportunity is golden, he said.
“Ultimately the world demand for non-traditional protein and fibre ingredients is rising.”