Low demand, high stock hit chana mart

Bearishness in the chana market is set to intensify further this week. Low demand, coupled with accumulated stocks with millers, has reduced offtake and is pushing the market into the red.

Marketmen, however, believe that the weak phase will be short-lived and the commodity will see a jump in the next 10 days.

The near-month contract, which a week ago was ruling at Rs 2,380 a quintal, tumbled by over Rs 100 today. The spot prices too slipped by around Rs 50-100 a quintal at major consumption centres across the country. 
 

ON THE DECLINE Spot rates of chana Rs/quintal
City	Week before	Current rate
Latur	2500	2450
Indore	2425	2325
Delhi	2400	2340

"Demand for chana in the physical market is weak and the prices have almost crashed by around Rs 100 a quintal in the physical market," said Suresh Agarwal, chairman, Madhya Pradesh Dal Udyog Mahasangh. He added that the market would move up in a few days.

In Delhi, the supply has almost reduced by half, with the city witnessing an arrival of only 250-300 tonnes a day as against the normal supply of 400-500 tonnes. In the capital, the spot rates are ruling at Rs 2,330-2,340 a quintal compared with Rs 2,400 a quintal a week ago.

According to commodity analysts, the near-month contract may crash by another Rs 100 to Rs 2,200 a quintal. The spot market might witness a further fall of Rs 40-60 a quintal, they added.

Akshita Bhatt, analyst at Kotak Commodities, said, "Demand has eroded and has put a cap on the rising market. But as there is a shortfall of produce in the country, weak sentiments will not last long and within one-and-a-half weeks, the market will hit back."

Market observers said that other pulses, including urad, moong and masoor, were also showing a downward trend. Till the last week, traders had been anticipating chana to scale up all the way to Rs 2,450 a quintal. Despite the unexpected fall, they said the market would firm up soon.

In the Latur physical market, chana dropped by around Rs 50 to Rs 2,450 a quintal. "There could be a further fall of another Rs 50, but the market will recover shortly," said Sanjay Darak, a Latur-based trader.

"Demand from millers has reduced. They might be waiting for prices to slip further so that they can make a comeback in the market," said Biswajit Lahiri, an analyst at Agriwatch Commodities.

Meanwhile, an increasing use of yellow peas in manufacturing besan has also helped reduce chana offtake. Sources suggested that earlier besan had chana and yellow pea in the ratio of 80:20, which now has changed to 50:50. Rates of yellow pea in the physical market currently is ruling at Rs 17-18 a kg.