Most of the farm commodity prices have softened with sunflower, while the price of gram has remained constant. Due to the weakening of the supply due to the rains, the price of gram has increased by about 26% in the last one month.
Chana has reached the highest level of eight months in the spot market due to the sharp rise. After six months in the spot market, gram has reached close to the official price (minimum support price).
With the arrival of the monsoon, the beginning of the gram is not taking the name of the fast paced start. Chana, which has been trading below the minimum support price (MSP) for six consecutive months, has reached MSP and in the spot market it has crossed the MSP level also.
In the spot markets of Indore and Delhi, gram has reached Rs 4,400 a quintal. The impact of this rally in the spot market has also affected the futures market. A month ago, the commodity traded below Rs 3,300 in futures market has reached Rs 4,200 per quintal.
In the July contract on NCDEX, gram prices have risen to Rs 4,150, August contract has touched Rs 4,215, Rs 4,244 in September and Rs 4,332 a quintal in October contract.
The reason for the increase in gram is being told to the weak inwarders in the mandis. Chana traders said that due to rainfall the arrivals are low whereas there is a demand from pulse mills, which is increasing the prices.
According to traders, Chana was selling 2,800-3,000 rupees per quintal in the spot market in April, while the government had declared its MSP at Rs 4,400. The reason for this was a huge resentment among the farmers.
Many states, including the Madhya Pradesh government, accelerate the government procurement to admit the farmers. Due to low prices in the markets, the farmers decided to sell their produce only at government procurement centers. Despite the closure of the purchase in these centers in June, the farmers are not selling gram in the mandis.
Due to this the prices are increasing. Prices of gram have reached the level of MSP in the spot market, which is expected to increase the availability of gram in the mandis. Even if there is no improvement in the supply at this level, prices will soon reach up to Rs 5,000 per quintal.
Futures market analysts believe that the prices of gram at the present level are not going to be reduced, some improvement may still be further.
Prices may be slightly better in futures markets, so prices are still lower than MSP. Despite this, chana is a rabi season crop, despite the current kharif season the sowing of pulses crops also affects the prices of gram. Due to the increase in MSP and due to the rains, it has increased due to the weak arrival in the mandis.
According to the SMC Commodity, the minimum support price in the Delhi market has crossed the level of Rs 4,400 per quintal due to continuous increase in gram prices.
Chana prices are being helped due to high demand from pulses and low availability in the market. Government has increased seven per cent incentive for export of indigenous gram till September 20. The impact of this has also fallen on the prices.