Urad zooms Rs 200 in a day

Spot price on NCDEX closed at Rs 2,949.55 a quintal

Myanmar urad is hotting up in India with its spot and futures prices seeing the largest single-day gain of over Rs 200 a quintal on Wednesday, mainly on the back of speculative buying by traders.

Urad prices "" both spot and futures "" have been volatile since the start of the month.

Spot urad price on the National Commodity and Derivatives Exchange (NCDEX) closed at Rs 2,949.55 a quintal "" a rise of Rs 213.10, while the February contract price closed at Rs 2,993 a quintal, up Rs 239, on Wednesday. The February futures on the Multi Commodity Exchange of India ended at Rs 3,001 a quintal, a gain of Rs 244.

The historical one-day rise is mainly attributed to rumour and speculation on the current wet weather conditions in Myanmar that, reportedly, may hamper the availability of urad in the country, especially the futures grade. The continuation of scattered rainfall may hit the crop's output badly resulting in overbuying by optimist traders.

Bulls are speculating on the shortage being faced by the markets for two reasons. One, new shipments would not be possible soon. Two, imported cargo of over 10,000 million tonne is in the hands of major stockists and importers, which may not come into the market if the Myanmar conditions improve.

Besides, crop shortage of about 40 per cent in Andhra Pradesh and Tamil Nadu has made a major impact on spot as well as futures urad prices.

"India produces about 12 lakh tonne of urad and imports about 2.5 lakh tonne from Myanmar. Despite self-sufficiency in local urad, futures trading is done on imported products, especially from the country where no production and supply data are available," a trader said.

Of late, new urad crop is arriving in small quantities at various rabi growing areas, including Andhra Pradesh, West Bengal and Chhattisgarh. But this will not have any impact on the current prices, as the availability of domestic crop hardly matters on futures prices.

"Currently, imported cargo is being held by most of the speculators and stockists having enough holding power, and this will keep the market sentiment firm to bullish," said Pankil Shah, head - commodities, Angel Commodities Broking.

Experts believe that the February contract will now see a short covering rally and prices may move towards the Rs 3,100 a quintal level, while rolling over the long positions will give boost to the March contract.

Also taking a cue from the February contract sentiment, the NCDEX March contract could see levels as high as Rs 3,030-3,050 a quintal by the end of February.