The Hindu Business Line : Urad prices likely to rise

Prices of urad (black matpe), which are currently ruling at a high of Rs 4,000-4,200 a quintal, could tend to rise from November onwards as arrivals from the kharif crop would peter out. On the other hand, rabi pulses are expected to hit the market only after January, while any arrival from Myanmar could be expected in February, according to trade sources.

"Urad crop from Maharashtra has already come to the market. The arrivals may hardly last for a month. After that, there will be little stocks available," they said.

A trading source in Mumbai said there were no physical stocks in urad and whatever was coming into the market was being consumed.

"Sellers aren't finding it difficult whatever stocks they have," said a Chennai-based source.

Kharif affected

The average annual production of urad in the country is 10 lakh tonnes and Maharashtra accounts for 4.5 lakh tonnes. The kharif crop in Maharashtra was affected due to heavy rains and the areas hit by the vagaries of weather account for 40 per cent of the State's total output. Trade sources say the shortfall in kharif urad could be around one-lakh tonnes.

According to the Mumbai source, arrivals have been delayed as some farmers had to go in for resowing of the crop. "At least 50 per cent of the area under urad was resown in Maharashtra," the source said.

With arrivals peaking, there could be an immediate Rs 200/quintal fall in the prices, the sources said.

"But the problem is bound to crop up once the arrivals are complete. Arrivals from Myanmar are expected only in February-March," they said.

Supply concern

According to the Chennai-based source, there could be a clear one-and-a-half-month during which supply could be a source of worry. "It can lead to a lot of speculation. Indeed, we can expect some rise in prices from November first week onwards. Spot prices, too, may flare up," the source said.

Also, imports into Chennai have dried up and traders in places such as Singapore are not willing to sell. "Currently, these traders are quoting $960-970 a tonne for superior quality urad, while for the fair average quality, the rates are $825-850," the source said.

In the futures market, urad for October delivery is quoting at Rs 3,980 a quintal on the NCDEX and Rs 3,988 on the MCX. For December, the rates are Rs 3,758 and Rs 3,779, respectively.

Rabi may jump

Meanwhile, the rabi pulses crop is expected to witness a huge jump in view of the firm prices. Not only that, some of the States such as Andhra Pradesh have said they plan to increase pulses production during kharif.

"Andhra Pradesh, for instance, has said it will at least double the area under urad, tur (pigeonpea) and moong (green gram)," a trader said.

While production is expected to rise, there are other factors that could hold the price line. One of the important factors seen holding the price is reduction in consumption.

"While it is unlikely that people will shift from urad to another pulse, it is likely that they may cut the consumption," the trader said.

With weather normally seen conducive during rabi for pulses, production is unlikely to be affected, he said.