Traders say MSP hike of urad, tur to have limited impact

The price of spot urad or black matpe in the local market today rose by Rs 64 per 100 kg from Wednesday's close, while that of spot tur or pigeon peas rose by Rs 22.

"The rise in the spot price of urad is mainly due to Wednesday's minimum support price. It would provide good support and would sustain a Rs 20," said Hitesh Sayta, a trader with city-based Shri Enterprises.

"It seems that in changing the MSP, the government intends to encourage farmers to shift their crop pattern from traditional farming of wheat and rice to pulses and oilseeds," said a Mumbai-based trader and importer.

"The increase in MSP was far lower than market expectations. The market expected an increase of over Rs 200 in urad prices," said Alex Mathews, head of research, Geojit Financial Services.

"The MSP announcement would have a limited impact on the market. Spot prices for these pulses are not likely to fall below the MSP declared by the government," said Sharad Maroo, another Mumbai-based trader.

Kharif crops are sown in June-July and harvested in October and November.

In the past, MSP for kharif crops was set in September, shortly before harvest, or during July-August when sowing is at an advanced stage.