Barley prices closed lower on Monday on the National Commodity and Derivatives Exchange Ltd (NCDEX) on account of a surge in arrivals along with sluggish demand.

Fresh arrivals of around 20,000 bags were reported in the major mandis of Rajasthan with the price ranging Rs 1,400-1,450 a quintal for all varieties. Around 500-600 bags arrived in the mandis in Haryana.

Restricted offtake by traders, beer and cattle-feed makers depressed sentiment with investors adding to the trend by booking profits on account of the weak physical markets.

On the NCDEX, barley futures for September contract closed at Rs 1,118 a quintal, down by Rs 31.5. October delivery stood at Rs 1,183 (down by Rs 19) and November contracts lost Rs 17 to Rs 1,229.5 a quintal.

Low prices of the cereal are likely to incite some stockist buying at lower levels due to poor production estimates in the current year along with the steady price of substitutes. Production of barley is estimated to decline by almost 6.50 lakh tonnes from 20.50 lakh tonnes of the last year.

This is due mainly to a decline in the productivity of barley crop in Rajasthan due to poor rainfall during the crop development stage (December- February). In the Jaipur spot market, barley was quoted at Rs 1,189 a quintal.