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Chana prices unlikely to fall much in present term

Abhijeet Banerjee
Abhijeet Banerjee

Chana prices are currently seen moving in narrow range in the spot markets. Similar price behavior is being noted in the derivative market. NCDEX May month chana has been moving in the range of 4000-4350 since last 4-5 weeks. Trade related activities are minimum due to the lockdown situation. The Lockdown is extended till 17 May 2020.

The mandis are allowed to open during April month although relaxations have been made to run various economic activities with pre-defined terms or conditions. But there are other concerns regarding shortage of labour, social distancing hence more number of participants not to be allowed, difficulty in getting transport vehicles etc. has led to significant drop in the daily arrivals. As such harvesting of Chana crop has been delayed by few weeks. Arrivals normally peak by May but this time peak arrival month seems to be June.

Traders therefore expect prices to remain in upward track more or less, for new few weeks. Demand is also suffering due to closure of restaurants, small eatery joints, big retail chains etc. which is adversely affected overall demand hence there are least expectations of prices to go above 4500-4600 levels in near term. This does not imply that prices can fall further from present levels since chana is a pulse item, which is a major item for daily consumption by the 133 Crore population of the country. Hence traders and mandi persons presently expect prices of chana move in a moderate price range and do not feel any sharp fall from prevailing offers. Technical analysts are of the view that June Chana contract of NCDEX is most likely to trade between 3950-4400 in the current month.

Chana is a Rabi crop and the acreage of the crop in the recently ended week is reported at 107.21 lakh hectares. As compared with the corresponding week of 2019, area covered has increased by roughly 11 lakh hectares area. Harvesting is over now. Rainfall received during winter season was beneficial for the crop which has favored sowing. There were Incidences of sucking pest in the fields but they are under control from usage of pesticides. Overall crop condition is normal and yield is also expected to be normal. Therefore year on year, acreage of Gram or chana has increased significantly. Meanwhile the procurement activity continues due to which market is getting supported after moderate down corrections. According to NAFED, The government has procured nearly about 2.5 Lakh metric tonnes of Chana as on April 30, 2020. As per reports from APEDA, Pulses export for April-September 2019-20 has fallen to 1.18 lakh MT from 2.89 lakh MT in 2018-19 same period. 

Find below the table giving details about quantity purchased state wise

State

Tentative Quantity Procured (MT)

Andhra Pradesh

103,398

Karnataka

70,570

Telangana

43,907

Maharashtra

24,049

Rajasthan

7,167

Uttar Pradesh

863

Madhya Pradesh

256

Haryana

62

All India Total

250,273

 

Imports on the other hand had been quite robust in recent months. According to the latest data from Directorate General of Commercial Intelligence & Statistics, chickpea imports by India has recorded solid jump during the month of December 2019, moving versus November 2019. Imports totaled 54,692 metric tons (MT) during the month, up 27% from the 42,897 MT exported the previous month. Imports so far have reached 329,226 MT, versus 201,386 during the previous calendar year. Tanzania was the number one export origin, shipping 26,991 MT. Second largest imported was Russia supplying 15,341 MT, followed by Turkey, importing 7,551 MT of Chickpeas. Therefore exports were in decreasing trend this marketing year while imports have posted a significant rise during later part of 2019.

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