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Bearish trend in pulses market

MARKET OUTLOOK

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Chandan Kishore Kant Mumbai
Bears are once gain active in the pulses market, thanks to imports and the recently announced minimum support price (MSP) for kharif crops.
 
Though prices of pulses are already ruling at their lows, market observers said that the next week might see some further weakness.
 
In the Delhi mandis (one of the largest consumption centres), last week chana witnessed a dip of around Rs 50-75 to Rs 2,200 a quintal. Urad fell from Rs 2,800 to Rs 2,600-2,700 a quintal. Tur remained almost steady at Rs 2,450-2,500 a quintal.
 
According to commodity analysts with Agriwatch Commodities, chana could see a further slip of Rs 50 a quintal. Urad is expected to come down to as low as Rs 2,500 a quintal. However, tur is to remain range-bound as the country's output is comparatively lower.
 
The government last week raised the MSP of moong and urad to Rs 1,740 a quintal (an increase of Rs 220) and that of tur to Rs 1,590 a quintal (an increase of Rs 180).
 
However, market sources said that such rises in the MSP might not have any impact on the ruling spot prices as they were far lesser than the actual ruling market rates. But on the production front, analysts feel the step would improve the production scenario.
 
According to analysts with Kotak Commodity, raising MSP before sowing points out that the government wants to improve acreage of pulses.
 
However, pinpointing the significance of the monsoon, they said, "Monsoon this year would be critical as from the past two years, unequal rainfall distribution had led to shortage in the domestic production thereby leading to a phenomenal rise in domestic prices." Pulses production has been stagnating at 12-14 million tonne since 2001.
 
But a section of pulses traders are unhappy with the MSP hike. Suresh Agarwal, chairman, Madhya Pradesh Dal Udyog Mahasangh said, "The MSP should be much higher than the announced one. For moong and urad, the government should have raised it to Rs 2,000 a quintal and in case of tur at least Rs 1,800 a quintal. This will only encourage farmers to grow pulses. The country has been dependent on imports for long," he added.
 
In Indore, pulses rates in the last two months have dipped significantly. Urad and moong have dropped by around 20 per cent from Rs 3,100 a quintal to Rs 2,500-2,550. Tur slipped to Rs 2,240 from Rs 2,550 a quintal. Similarly, chana is trading in mandis at Rs 2,280, down 9.5 per cent, from Rs 2,520 a quintal.
 
"Rates are already at their lows," said Agarwal. Traders in Latur too see bearish trend in the market next week. "There is no upward pressure on pulses rates. Tur is range-bound at around Rs 2,450 a quintal and shows no signs of bullishness. Chana may see some fall," said Shankar Nadar, a Latur-based trader.
 
Chana futures for June delivery on the National Commodity and Derivatives Exchange (Ncdex) closed at Rs 2,277 a quintal on Saturday, down 2.8 per cent compared with the last week's Rs 2,342 in the previous week.

 
 

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First Published: May 20 2007 | 12:00 AM IST

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