SEBI allows NCDEX to launch chana futures

Capital and commodity market regulator SEBI has allowed the NCDEX to re-launch futures trading in chana (chickpea). Trading in this commodity was suspended last year due to the concern over rising prices.

In March, NCDEX moved SEBI to re-launch trading in all the suspended pulses contracts: tur, urad, chana and yellow peas. In 2007, futures trading in tur (pigeon pea) and urad (black gram) were banned after prices soared.

However, most kharif-harvested pulses are currently selling below the minimum support prices on the back of a bumper crop. For instance, pigeon pea (tur) has been trading at about ₹4,000-4,200 a quintal, far below the MSP of ₹5,050 a quintal.

The same is the case with urad and moong. Pulses output is expected to touch a record 22.4 million in 2016-17 (crop year ended June).

With government agencies such as National Agricultural Cooperative Marketing Federation and Food Corporation of India holding a huge inventory bought under MSP (minimum support price) operations, the government is now more open to allowing futures trading in pulses.

The government agencies and farmers can offload their inventory in case pulses prices rally on the futures market on speculation of lower yields due to inconsistent progress of the South-West monsoon, said sources.

In fiscal 2016-17, Nafed had procured pulses and other commodities worth ₹5,800 crore and in the current fiscal it has bought commodities worth about ₹2,500 crore.

Despite pulses prices falling below MSP last season, pulses acreage in the ongoing kharif season has gone up by 23 per cent to 44.11 lakh hectares as the government has substantially increased the MSP of tur, moong and urad, the major kharif pulses.

The tur MSP has been increased to ₹5,450 a quintal from 5,050, while that of moong was marked up to ₹5,575 from ₹5,225 a quintal. Urad MSP was hiked by ₹400 a quintal to ₹5,400.