Commodities

Chana soars on supply crunch, firm demand

| | Updated on: Jun 06, 2016
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Importers cut shipments on stock-limit fears; expectations of an MSP hike may hold prices firm

Chana prices on the NCDEX hit a new high on Monday with the near month June contract touching ₹6,440 a quintal from ₹6,250 recorded on Friday.

Chana for delivery in July was up 3 per cent at ₹6,475 (₹6,306) a quintal.

In fact, chana prices have been rising for the last few days on the back of lower supply and firm demand in the spot market.

This apart, the government decision to hike the minimum support price for kharif pulses has led to expectations that chana, a rabi crop, would receive the same benefits.

Veeresh Hiremath, Research Analyst, Karvy Comtrade, said import price of chana has also been rising steadily with the landed cost hitting ₹57 a kg against ₹50 in May.

In the last four months, import prices have gone up by ₹2,000 a quintal, he added.

Demand strong The demand for chana has remained strong over the last few days with Ramzan starting on Monday followed by Hindu festivals, he added. Most importers have cut shipments on fear of the Centre imposing stock limits to bring down prices.

Incidentally, the government’s plan to build a buffer stock of pulses has boosted prices in the international markets.

MSP expectations The minimum support prices for the kharif pulse of tur was hiked by ₹425 a quintal to ₹5,050, while that of moong and urad was marked up by ₹375 to ₹5,225 and ₹5,000, respectively, to encourage farmers to grow more pulses and reduce the country’s dependence on imports.

“Traders expect the government to carry forward the largesse to the rabi crop and if the monsoon turns out to be good till September as widely expected it would improve the moisture leading to better chana coverage and higher output. Until then chana prices will remain firm,” said Sunil Deshpande, a pulses trader.

Rising imports To meet the growing demand, the country imports over 70 per cent of its chana requirement from Australia, which is turning out to be a costly proposition.

The Centre is also weighing the option to import chana from Myanmar by entering into a long-term contract.

Chana imports touched about 10.31 lakh tonnes in the last financial year — up 146 per cent compared to financial year 2014-15.

India, the largest producer, consumer and importer of pulses, produced 17.5 million tonnes of pulses and imported another 5.2 million tonnes.

Published on January 20, 2018

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