Urad prices may fall 20% by April

Urad prices are likely to decline by 20 per cent as a fairly average crop from Andhra Pradesh is expected to hit the market by April, feel traders.

The crop may lift the country's output by 13-15 lakh tonne, which is around 10 per cent of the total pulse output of 120-150 lakh tonne.

At present, ready urad is quoted at Rs 3,000 a quintal, while futures for March-April are quoted between Rs 2,500 and Rs 2,600 per quintal, a decline of up to Rs 50 per quintal over its previous close.

Total domestic consumption of urad is estimated at about 13 lakh tonne, of which the country imports about 2 lakh tonne from Myanmar.

According to a local trader, pulses imports have gone up dramatically on the government's decision to allow duty-free imports to bring down prices in the domestic market.

The trader said a clear picture of the crop in Andhra Pradesh by May is expected to be a key price driver. Andhra Pradesh contributes about 70 per cent of the country's total output.

Meanwhile, according to data at Commoditiescontrol.com, a commodity-based portal, urad prices have declined between Rs 25 and 50 per quintal across the country on Saturday owing to the absence of physical buying. In Chennai, Burmese urad was quoted at Rs 2,751 a quintal, while SQ variety was sold in the range of Rs 3,000-3,025 a quintal.

The buying sentiment remained absent due to the government's decision to ban futures on exchanges and duty free imports.

Experts believe that the pulses production needed most modern technology for high yield as the conventional sowing, irrigating, plant care and harvesting pattern could no longer pacify the growing demand.

On the other hand, heavy rains during tur flowering in the major producing areas - Karnataka, Andhra Pradesh, Maharashtra, Haryana and Uttar Pradesh - resulted in 30 per cent output loss. The may pull down this year's overall output to 18 lakh tonne against the normal output of 22 lakh tonne.

Also, the crop in other tur-producing countries - Myanmar, Kenya, Uganda and Malavi - is also 20 per cent less this year, which is expected to boost prices in the long run.

Prices of tur and urad have moved in accordance with supply conditions. Tur production was lower this year at 24.7 lakh tonne against 25.7 lakh tonne last year.

India imported 1.75 lakh tonne tur in 2005 that slipped to 1.5 lakh tonne in 2006. Traders have started looking at levels of around Rs 4,000 a quintal following a shortage of supplies and rising demand.