The Hindu Business Line : Chana prices up on tight supplies

Mumbai March 27 Chana (gram) prices are unlikely to turn consumer-friendly anytime soon. The Agriculture Ministry has estimated production at 61 lakh tonnes; but traders are not convinced. Output may be at least 5-10 lakh tonnes lower due to the recent rains in Madhya Pradesh and Rajasthan, they assert. Moreover, lack of carryover stock may result in tight supplies and firm prices.

In 2005-06, the production was 45 lakh tonnes and the carry-in for the new season was 87,000 tonnes, which was well below the annual consumption 8of 60 lakh tonnes.

Reflecting the tight demand-supply situation, chana for April delivery on

NCDEX shot up from Rs 1,998 per quintal on March 1 to Rs 2,307 on Monday.

Spot prices in Delhi jumped from Rs 2,249 per quintal on March 1 to Rs 2,307 on Monday. In October 2006, spot prices touched Rs 3,200 per quintal.

"We sold our left-over stock in September last year when the prices touched

Rs 3,270 per quintal. We might not see such high prices this year," said S. Dinesh, a Delhi-based wholesaler. The Government banned exports till March 2007 and has now extended the ban for another year to ensure domestic availability.

Higher acreage

Chana, essentially a rabi crop, contributes about 40 per cent of the country's total pulses production of 15 million tones. Last year, rise in prices encouraged farmers to shift to chana cultivation, which is reflected in a higher acreage of 76.52 lakh hectares in 2006-07 against 69.05 lakh hectares last year.

"Frequent government interventions to control retail prices are going to keep the markets on tenterhooks. Fundamentally, chana futures are set to trade on the higher side," said Mr Harish Galipalli, head of research, Karvy Comtrade.

Stagnant output

Harvesting of chana takes place in February-March in Maharashtra and Madhya Pradesh, while it is done during March-end in Rajasthan. The production has been stagnant for the last 15 years. Yields continue to be low.

Madhya Pradesh, Uttar Pradesh, Maharashtra and Rajasthan contribute about 70 per cent of the total chana production. However, Madhya Pradesh and Maharastra, the two largest producing states, have recorded an output decline in the last few years, which is partially compensated by a slight increase in southern states Karnataka and Andhra Pradesh.