The Hindu Business Line : Chana could gain in long term

Mumbai June 24 The delay in the onset of the monsoon in pulses growing States such as Maharashtra, Madhya Pradesh, Uttar Pradesh and Rajasthan has brightened the prospects of chana futures in the long term. Demand for chana flour picks up with the advent of monsoon.

Currently, prices of chana futures on NCDEX are under check due to increase in the warehouse stocks. It has increased from 28,500 tonnes in May to 35,645 tonnes on June 22.

Far months firm

Chana futures for the coming months rule firm than the near month contracts. Chana for July delivery on NCDEX traded flat at about Rs 2,321 per quintal over the week. August contract was at Rs 2,384 and

September futures closed at Rs 2,439.

Size of delivery for the June expiry would set the price trend. However, the open interest of 8,500 tonnes indicates that deliveries for June may not be that large. Traders have been covering their short positions.

Chana spot prices have been range-bound in the last few weeks mainly due to lack of any fresh trigger. Daily average arrivals to the Delhi markets have been around 40-60 trucks, mainly from Rajasthan and Madhya Pradesh. Spot prices in Delhi rose marginally by Rs 30 to Rs 2,235 per quintal over the week.

Output Estimate

"Sowing of kharif pulses started about 20 days behind June first week schedule. These are still very early days but late sowing generally results in late arrivals," said Mr Shardul Sharma, research analyst, Share Khan Commodities.

The Government recently revised chana output estimate for 2006-07 to 58-59 lakh tonnes, lower than the earlier estimate of 62 lakh tonnes. However, trade estimates are still lower at 55-56 lakh tonnes. Chana accounts for approximately 53.3 lakh tonnes out of a total pulse production of 152.3 lakh tonnes.

In a move to curb pulses price rise, the Union Government has mandated NAFED, STC and MMTC to import 15 lakh tonnes of pulses by March 2008. However, public and private agencies have imported around 30 lakh tonne of pulses so far.

Global prices firm

The Government plan has also led to hardening of international prices. Chana imports from Canada, Australia, Iran and Myanmar have firmed up on an average by $30-35 per tonne.

"We expect chana futures to touch Rs 2,500 per quintal by August, though in the short term it might trade in ranges with small gains at times," said Mr Sharma.

More Stories on : Commodity Exchanges | Pulses

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