Chana

Chana prices went up by 2 per cent to Rs 4,641 per quintal in futures trade, driven by rising demand at the spot market. At the National Commodity and Derivatives Exchange, Chana for November moved up […]

Chana prices went up by 0.96 per cent to Rs 4,212 per quintal in futures trade, as participants enlarged their positions, tracking a firm trend at the spot market on surging demand. Expanding of positions by traders on the back of strong demand in view of ongoing festive season and increased offtake by dal mills in the physical market mainly attributed the rise in chana prices at futures trade.

The NCDEX Dhaanya index rose 9.82 points to 3205.08 points, largely due to gains in chana and castor seed contracts. A fall in guar seed contracts restricted the rise in index. Dhaanya is a value-weighted index, computed real-time using the near-month prices of 10 most liquid commodity futures. The components of the index and their weights are re-balanced every quarter. Currently, chana and guar seed carry a weight of 20% each, soybean 16%, and mustard seed 15%, and cottonseed oilcake 8%. Castor seed, coriander, barley, jeera, and turmeric are the other components of the index.

Agro-centric National Commodity & Derivatives Exchange (NCDEX) plans to launch options trading in four new contracts namely, guargum, soybean, refined soy oil and chana within two weeks. Currently generating a daily average turnover of around Rs 40 million in guarseed options, its only agro contract currently, the exchange has already received approval from the markets regulator the Securities and Exchange Board of India (Sebi) to launch options trading in these additional commodities.

Despite higher arrivals, chana prices in Delhi rose as the government extended the import ban on peas for another three months until December and on improved demand from the dal millers. In Delhi, the pulse was sold at 4,425 rupees per 100 kg, up 75 rupees. Halt in the chana sales by NAFED is also seen creating positive sentiments.

Chana acreage in Madhya Pradesh is likely to rise 10% on year in 2018-19 (Jul-Jun) as patchy monsoon rains may prompt farmers to shift from wheat. Area under chana in Madhya Pradesh, the largest producer of the pulse, was 3.6 mln ha a year ago. Rains were not good in most parts of the state and that’s why farmers are expected to shift to chana from wheat. Farmers are likely to shift to chana mainly in Malwa, Nimar, Narmadapuram and Mahakaushal regions of the state. If farmers switch to chana, production may also rise nearly 10% on year to 5.4 mln tn.

Prices of chana declined in the key market of Bikaner due to subdued demand from dal millers. In Bikaner, chana was sold at 4,000 rupees per 100 kg, down 50 rupees. In the benchmark market of Delhi, however, the pulse was at 4,225-4,250 rupees per 100 kg and arrivals were at 375 tn.

Prices of chana rose in Delhi because of improved demand from dal millers. In Delhi, the benchmark market for the commodity, chana was sold at 4,250 rupees per 100 kg, up by 25-50 rupees. Restricted sales of the government’s procured inventory also supported prices. In Bikaner, a key market, prices were steady at 4,015 rupees per 100 kg.

Prices of chana fell in Delhi due to subdued demand from dal millers. In Delhi, the benchmark market, prices of chana were down by 50 rupees. However, arrivals of chana declined. Prices of chana are likely to increase in the coming days owing to sluggish sales of government-procured stocks.

Ahead of the festival season, the government has released some stock of chana from buffer stock in the market to ease its availability and keep a check on the prices. Nafed sold 1100 MT of chana through auction in Andhra Pradesh and Telangana at Rs 4006 per quintal. Nafed may start selling chana in Andhra Pradesh, Telangana, Karnataka, Gujarat and UP from buffer stock. No benchmark price of chana has been fixed for auction. Chana stock with Nafed is around 27 lakh metric tonnes. According to the fourth advance estimates released by the government, India’s chana production estimate for 2017-18 is 11.23 million MT which is 18.97 per cent higher than 2016-17 final production estimates of 9.38 million MT. However, market participants are expecting production to be around 9 million MT. Moreover, imports of chana is not happening this year due to thirty per cent import duty. According to DGFT, India chana imports for 2017-18 is recorded at 9.81 lakh MT which is 9.19 per cent lower than the imports of 10.80 lakh tonnes for 2016-17.

Futures contracts of chana erased earlier losses and rose slightly on NCDEX as the government restricted import of peas. September contract chana on NCDEX was up 9 rupees at 3,900 rupees per 100 kg. Peas are largely used as substitute for chana. The chana contract had hit a seven-week low of 3,754 rupees. The government had lifted the 100,000-tn import cap on peas that was in place till Sep 30, following the order of Madras High Court. Chana prices in Delhi were up 50 rupees at 4,225 rupees per 100 kg, Vikas Gupta, local pulses trader said adding that if NAFED sells chana below 4,000 rupees it will create selling pressure.