Amid expectations that Maharashtra, Gujarat, Haryana and other states may take stern action against hoarders, prices in the spot chana market in Bikaner declined by 5.5 per cent on Tuesday. The Rajasthan government has imposed a stock limit of 20 tonnes for the commodity.
Chana is now being quoted Rs 135 less at Rs 2,325 a quintal compared with Rs 2,460 on Monday following the stock limit order. Traders were asked to sell their additional stock within 15 days. The state government has acted on the prime minister’s advice on Saturday to enforce a stock limit in an attempt to check hoarding of essential commodities.
However, the commodity in the futures market is still holding forth despite falling 2.27 per cent for near-month delivery on the National Commodity & Derivatives Exchange (NCDEX). The calendar spread (price difference on the same exchange) between two subsequent future contracts was wide, indicating a low near-month demand, said Kishore Narne, head of research, Anand Rathi.
But its demand was holding high for far-month contracts, which might push up prices further to widen the calendar spread, Narne said.
Meanwhile, arbitrage opportunity between spot and future contracts has been healthy for traders. This will lead to selling in the futures market at higher levels and buying in the spot market at lower levels, since the near-month contract on NCDEX is expiring on August 20, well ahead of the Rajasthan government’s deadline. In the spot market, chana is currently trading at Rs 2,325, down 4.32 per cent than its near-month contract. In Delhi, the spot price has fallen 2.56 per cent to Rs 2,436.
Traders would be forced to release additional stock immediately, which was likely to lower prices in the near future, Narne added.
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Chana, a rabi crop, is sown in October-November and harvested in February. Last year, the country’s total production of the commodity was recorded at 7 million tonnes as against 6.2 million tonnes in the previous year.
Despite sufficient stocks, chana prices were rising amid apprehensions that the commodity would follow other pulses in terms of higher prices due to supply shortage.
Traders believed that consumers would shift from the relatively costlier tur and urad varieties to the cheaper chana variety. Tur and urad prices have appreciated over 40 per cent in the last two months due to scanty rainfall during the current monsoon season.