Chana jumps 17% in a month

Surge is in anticipation of export to Pakistan

Chick pea (chana) is the second commodity after sugar which has witnessed an unexpected surge in prices in anticipation of export to Pakistan.

Spot desi chana in Delhi spiralled approximately 17 per cent in the last one month to Rs 2,490 a quintal on Friday from the Rs 2,133 it was quoting on April 10. It had peaked to all-time high of Rs 2,543 on Thursday before profit booking slightly brought down prices.

"Stockists hold the position and the market moved according to them but today retailers are enthusiastic about selling their small reserves," a trader said.

Speculative buying lifted spot chana in Bikaner, one of the major trading centres, where price picked up to the new high of Rs 2,512 a quintal before settling at Rs 2,463 with a monthly gain of 15 per cent.

At the National Commodity & Derivatives Exchange, prices for nearby contract (May 2006) surged by about 14 per cent to Rs 2,577 per quintal from Rs 2,275 a month ago.

The Multi Commodities Exchange of India also witnessed a similar price gain of about 14 per cent for nearby month contract to Rs 2,570 from Rs 2,251 a month ago.

Traders are of the opinion that prices would remain high owing to increased buying even at the higher levels by millers and stockists. A school of thought considers this abnormal price increase as a consequence of anticipated exports to Pakistan but physical traders take it as speculative activities.

"Fundamentals are bearish. Hence, the chana price rise bubble may burst any time," a Jalgaon-based trader said.

Although speculation is rife for exports to Pakistan, no confirmation of any orders has yet been received, he added.

There was an unusual rise in chana production in Pakistan to 13 lakh tonne last year as compared with normal production of 5 lakh tonne. In turn, India produced 5.85 million tonne last year which is 70 per cent of the world total production. Unconfirmed report says that Indian traders have exported 4000 tonne of chana in the recent past.

Today, demand in physical markets around the country is very low with stockists' reserves being high in Delhi and Bikaner. Some stockists are also building their stocks in hope of better prices realisation in the future, a local trader said.

In fact, some multinational companies have also been buying the pulse in large quantity, creating a supply shortage.

Despite an imminent correction looming large for the short term, there is still room for price rise in the long run to Rs 2,700 a tonne over the next month, the trader said.

The world's total production of chickpeas hovers around 8.5 million tonne annually and is grown over approximately 10 million hectares of land.

Desi chickpea contributes around 80 per cent and the Kabuli variety around 20 per cent of the total production.

Desi type chickpeas largely dominate the ratio of production in India. Interestingly, chickpea is not a much exported commodity as it usually consumed within the country of its production.

India imports around 5-6 lakh tonne of chana annually from Canada, Australia, Iran and Myanmar.