Chana prices under pressure

Chana futures contracts on the NCDEX declined for the third consecutive week due to sluggish demand amid higher supplies. The contract plunged 7.43 per cent. The festival season also failed to attract demand from end-users and reports of high imports of chana from Australia weighed on the prices. The November contract reversed lower from its intraweek high of ₹5,692 per quintal and closed at ₹5,269 per quintal.

Recently, the Food and Consumer Affairs Minister announced the disposal of seven lakh tonnes of pulses from its buffer stock. Last year, the Centre had procured 20 lakh tonnes of pulses to create buffer stock to ensure better prices for farmers and use the stock to augment local supply when prices rise. Currently, about 18 lakh tonnes of pulses lie as buffer stock in the godowns and the release of this is having a negative impact on chana.

The focus would be on the sowing progress of chana as it is a rabi crop and the sowing activities will commence in October. Currently, the market prices for chana are not attractive for farmers to cultivate chana. The progress of monsoon in the next few months will also be a deciding factor for determing the area sown under chana. As per our preliminary assessment, area under chana is likely to decline in the coming rabi season.

Outlook to improve

For the week ahead, the chana futures are expected to recover on account of short covering and bargain buying at lower price levels. However, the gains could be limited due to the stock release by the Centre and higher imports.

The writer is Head-Commodity Research, Karvy Comtrade

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