Chickpea (chana) futures hit a 52-week high recently on the NCDEX, causing a flutter in the market. Prices quoted at ₹5,500 per quintal for the NCDEX October futures on Thursday.

In its comment on chana futures, Kedia Advisory stated: “Improved demand from bulk buyers/stockists following the onset of the festival season, amid lower supplies due to slack arrivals, supported the market sentiments. The NAFED Chana sales at higher prices also supported the prices. NAFED sold out chana in the range of ₹4,901-5,071 per quintal.”

Speaking to BusinessLine , Bimal Kothari, Vice -President, India Pulses and Grains Association (IPGA), said that the rally in price can be attributed to the supply concerns in the market.

“The government’s crop estimate of about 11.4 million tonnes of chickpea is ambitious. But even if we consider a fair crop size of about 10 million tonnes, there is going to be short supply in the market. Against the demand of eight million tonnes, there will be only 6.6 million tonnes available for consumption for the next year, given that the NAFED purchases will take away about 2.1 million tonnes of stock from the market and about 1.5 million tonnes will be taken by the buyers who used to buy yellow peas and Kabuli chana (these have not been imported now because of high duty).”

There is not going to be any additional supply till the new crop arrives in February, say market sources, and this is a reason why prices are sky-rocketing.

Talk of import duty cut

Chana futures strengthened further in the NCDEX on Thursday by about 0.7 per cent even as there were rumours of a possible chana import duty cut by the government. “This is a rumour only. But even if the government considers relaxing the import duty cut, we believe that it shouldn’t be slashed down drastically, as such a move will only benefit the foreign sellers and farmers. Any duty reduction, if at all, should be moderate,” Kothari added.

Australia is the leading supplier for chickpea to India but the import consignments are expected only around late December or early January, trade insiders explained. The international prices currently hover around $540 per tonne. After three years of drought, Australia will see its crop production spike in 2020-21, according to the Australian Bureau of Agriculture and Resource Economics and Sciences (ABARES), which may get pushed to India if the duty is reduced.

On the consumption side, what has also fuelled the demand is the government scheme for distributing 1 kg of pulses per month to 1.95 crore households under Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY), which has been extended up till November. A similar distribution was made for migrant workers during the post-lockdown period of May and June.

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