The Hindu Business Line : Cold spell, rains hit chana crop

Outlook
Against demand of 55 lt, chana output is seen at 51-52 lt.
Prices may slip in short term when arrivals peak.
Bullish trend seen in the medium to long term.

M.R. Subramani

Chennai, March 7 An unusual cold spell, especially in the North, and rains during January have affected chana (chickpea or gram) crop this year with some farmers even reporting total loss.

“The feedback we have got with regard to chana says the crop has been affected in Madhya Pradesh and Rajasthan,” said Mr K.C. Bharatiya, President of the Pulses Importers’ Association.

“We have lost growing chana this year due to the cold spell. However, wheat has helped us overcome that,” said a farmer from a village near Indore.

Madhya Pradesh accounts for over 40 per cent of the total average chana production of 55 lakh tonnes (lt) in the country.

According to trade sources, rains and bad weather have combined to wipe out the chana crop in Andhra Pradesh’s Rayalaseema region and parts of Karnataka. Andhra Pradesh accounts for 11 per cent and Karnataka four per cent of the country’s chana production.

Fall in acreage

On the other hand, weather has come as a double whammy for chana, which has already seen a 4.3 per cent fall in its coverage as farmers shifted to crops such as wheat this year.

According to the Ministry of Agriculture, this year chana was sown in 80.29 lakh hectares (lh) against 83.86 lh last year.

According to Mr Amol Tilak, research analyst with Kotak Commodity Services Ltd, reports had been received of chana-growing regions in Madhya Pradesh, Rajasthan and Uttar Pradesh being affected by the cold spell, resulting in a delay of harvest and also some damage to the crop.

Together, Rajasthan and Uttar Pradesh make up 20 per cent of the total chana production.

incur losses

“In fact, the cold spell caught the trade by surprise. There were instances where on hopes of a record chana crop, prices had crashed and some traders sold the pulses at losses before the cold spell,” said a South Indian trader. “We bought chana for Rs 22 a kg and on bearish reports of a good crop, we sold at Rs 20,” the trader said.

Currently, chana is quoted at round Rs 2,715 a quintal in Indore, while June futures on NCDEX are ruling around Rs 2,942. Chana for July delivery ruled at Rs 2,967 a quintal. Futures prices have declined during the last two trading sessions from around Rs 3,050 a quintal.

Short supply seen

“Against a demand of 55 lt, chana production is expected to be 51-52 lt. Imports could fill the gap but this could lead to another year of tight supply. Therefore, prices are expected to rule firm,” said Mr Tilak.

“As per our indications, chana production may be around 47-48 lt only. This means imports of pulses will continue this year too in a big way,” Mr Bhartiya said.

According to the Government’s estimates, chana production during 2006-07 was 59 lakh tonnes against 52.7 lakh tonnes a year ago.

However, in the short-term prices could witness a decline when arrivals peak but it would only be temporary, Mr Tilak said, adding that it would be bullish in the medium to long term.

Trade sources said the demand-supply gap is a bit large that only yellow peas can fill rather than imports. Yellow peas, most of which is imported from Canada, is in ample supply and it could keep chana prices on leash.

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