Commodities

Urad, chana prices crash by 20% from year’s high

Vishwanath Kulkarni Bengaluru | Updated on June 29, 2021

Pressured by Govt measures, supply chain disruption, lower offtake due to Covid

Prices of pulses, especially chana and urad, have declined by about a fifth over the past several weeks from the highs seen earlier this year. Chana prices have dropped by about 20 per cent from peak levels in April to breach the ₹5,000 per quintal mark on dip in demand due to Covid second wave coupled with NAFED’s move to liquidate stocks. Similarly, prices of urad (black matpe) have crashed by over 20 per cent since May 15 after the Centre opened up imports under the open general licence (OGL).

Spot chana prices have slipped below the MSP level of ₹5,100 per quintal. Modal prices currently ranging between ₹4,600 and ₹4,900 across various markets in Madhya Pradesh and Rajasthan. Trade sources said the chana prices are likely to remain under pressure in the near-term and the likely fallout of the covid third wave and the demand ahead of the festive season would set the further price trend.

Fear of traders

Jitu Bheda, Chairman, Indian Pulses and Grains Association said, besides the decline in demand due to Covid, the move by the Government to ask for stocks held by traders has created fear among the trading community. Also, Nafed has started selling chana in the local market, which has contributed to the decline in prices. All these factors has created a panic in the market, he said.

Suresh Agarwal, President, All India Dal Mills Association in Indore, said consumption has taken a hit due the lockdown measures to contain coronavirus. “Prices are hovering around ₹5,000 and unlikely to go down further as there’s still lot of time before the next crop comes in. Consumption of gram is unlikely to see a growth due to the fear of spread of coronavirus and the restrictions imposed by the government on events such as marriage and public events. Also, prices of other pulses such as tur and moong have softened,” Agarwal said. Further, Agarwal said the chana market may improve depending on the progress of the south-west monsoon. In the futures market, chana has weakened in the past few sessions.

Demand to continue

“We don’t see any material fall or free fall in chana prices,”said Ajay Kedia of Kedia Advisory. With the distribution of foodgrains expected to continue for few more months, the demand for pulses would continue. However, there’s still some anxiety about how the third wave will be impacting. “Demand is not picking up right now. As vaccination progresses and if the third wave doesn’t impact much, we see some low level buying improving. In the next few days, the market will be sideways to down, but going forward, demand would be more,” Kedia said.

Rahul Chauhan of IGrain India expects chana prices to come down further a bit as Nafed has started selling stocks in Maharashtra. “Also with the imports of other pulses such as tur, moong, urad under OGL, there will be some pressure on chana prices,” he said.

Disrupted suplly chain

Chauhan said the supply chain has been disrupted and overall consumption has taken a hit due the Covid second wave. “As the impact of the second wave comes down, the domestic demand is not on expected lines,” he added.

Fall in urad prices

Urad (black matpe) prices have also crashed by over 20 per cent since May 15.

“When the Centre announced that import of pulses will be allowed under the open general licence, urad prices in Chennai dropped immediately by ₹12,000 a tonne from ₹86,000,” said a Chennai-based pulses importer.

Currently, urad is quoted at ₹67,000 a tonne in the metropolitan city. “Without exception, all urad traders and stockists have been affected by the steep fall due to the Centre’s decision to allow imports of pulses without any curbs,” the importer said.

(With inputs from Subramani Ra Mancombu, Chennai)

Published on June 29, 2021

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