UTRECHT, NETHERLANDS — While pulses remain a niche agricultural product with global production estimated at around 100 million tonnes annually, the potential exists for growth into a more widely produced and distributed grain, according to a recent report from Rabobank.

The report authored by Vito Martielli, senior grains and oilseeds analyst at Rabobank, said new demand for pulses is increasing, due in part to their sustainability profile, which includes natural soil-enhancing and greenhouse gas absorbing qualities. 

“Pulses have become a star in the drive to make agriculture more sustainable,” the report, which was released in August 2024, noted.

Unlike wheat and corn, which see global production at roughly 1.2 billion and 800 million tonnes, respectively, and are grown in dozens of countries around the world, the major varieties of pulses — chickpeas, dry peas and lentils, which account for 40% of total pulse production — are grown and exported by just a few countries, Rabobank said. Overall, there are 20 varieties of pulses produced globally.

While chickpeas mainly are produced in India, the biggest producers of dry peas are Russia, the United States, Canada, the European Union and Ukraine. Canada, Australia and the United States account for almost all the world’s lentils output.

Dry peas, chickpeas and lentils account for 68% of the total global trade of pulses, according to the International Grains Council (IGC).

New market players

The report said new market players are starting to emerge in global trade.

“Trade flows are changing, and we see new players emerging at the global level in both origination and destination,” Rabobank said.

These countries include Russia, which has increased its share of dry peas exports, Egypt, which has become the largest buyer of fava beans, Argentina, which is now a key exporter of several different types of beans, and Turkey, which has become a major hub in the Middle East and North Africa region for first-degree processing and pulses distribution.

Since 2015, global trade of pulses has increased by 29%, and during that time the compound annual growth rate (CAGR) for trade was 3%, the Rabobank report said. 

The IGC estimates that global pulse trade reached approximately 21 million tonnes in 2024, accounting for about 20% of total pulse production. But as the Rabobank report points out, these are relatively small volumes when compared to global wheat trade, for example, which was estimated to reach 210 million tonnes last year. 

Rabobank said there are two major factors driving demand for pulses globally: increasing consumption in emerging markets as a key and cheap source of protein and increasing consumption in developing countries because of pulses being a central ingredient in plant-based meat and dairy substitutes. 

Sustainability superstar

The report said that in addition to being an affordable source of protein for emerging and developed markets, pulses check off many boxes regarding agricultural sustainability.

Pulses are nitrogen-fixing plants and are therefore important for rebuilding soil fertility. They have the capacity to mobilize phosphorus and other nutrients essential to the soil. Their nitrogen-fixing capabilities come from absorbing nitrogen from the air, therefore absorbing greenhouse gases. 

They also enhance soil structure, as their deep root system increases pore space and cohesion in the soil, increasing water-holding capacity and soil aeration. 

Rabobank also noted that pulses are an excellent rotational or cover crop. This adds to soil biodiversity by increasing microbial activity in the soil.

Barriers to entry

Unlike grains, pulses are not yet considered commodities, and there are still barriers to entry in this niche industry, Rabobank said.

“Prices are volatile and there is a lack of transparency in the price discovery process,” Rabobank said. “In addition, there are few sources of data to provide market insights at a global level. Consequently, creating more market transparency will be the key to attracting investment to the industry, meeting the growing demand for pulses, and improving trade volumes and market functionality.

“These factors will help this growing niche industry to reach its full potential,” Rabobank said.

The pulse industry received a boost in this regard in 2021 when the IGC announced that pulses would be included in its definition of “grains” under Article 2(1)(e) of the Grains Trade Convention. The IGC began providing updates on pulses trade and estimates of production in its Grain Market Report on a bimonthly basis. Supply and demand balances are published for the major exporters of dry peas, lentils and chickpeas.

By extending the definition of grains to include pulses, the IGC said it was “seeking to increase market transparency for pulses and to enhance cooperation to increase the global trade of this commodity which plays an essential role in achieving food security.”

Many of the world’s major agribusiness companies have become involved in pulse production and processing, including United States-based ADM, Bunge, Cargill, Columbia Grain International and Redwood, as well as Germany-based Müller’s Mühle. 

The latest company to add pulses to its portfolio is Netherlands-based Louis Dreyfus Co. (LDC), which announced in late August that it has created a business unit dedicated to pulse commercialization. 

Michael Gelchie, chief executive officer of LDC, said pulses “present geographic and operational synergies with LDC’s existing business activities and, as such, have the potential to contribute significantly to earnings.”

“The decision to establish this new business unit is fully aligned with our strategy to meet evolving nutritional and sustainability expectations for customers, reflected in both global production and demand growth,” he said.

Gelchie said LDC already has a presence in key pulse production hubs such as Australia, Canada and East Africa, as well as major consumption markets such as India, China and the Middle East.