Chana prices may go up 16% on lean harvest

A slump in production and scarce inventory are set to push up chana prices by 16 per cent during the coming festive season.

India produces around 36-38 lakh tonne of chana per annum. However, the consumption is over 50 lakh tonne per annum. Rest of the requirement is met by imports, mainly from Australia.

"At present, the available stocks are almost half of the demand, which stands at 50,000 tonne per day. All over India the stocks stands at 5 lakh tonne," said Dilip Jindal, a Delhi-based trader.

He added,"By mid-October, prices are bound to notch up to Rs 3,000 per quintal from the current Rs 2,600."

According to the sources, the production this year is down by around 8 lakh tonne to 28 lakh tonne.

The major growing regions like Madhya Pradesh and Rajasthan has witnessed lesser production due to weather uncertainties. Production in Madhya Pradesh fell down by 7 per cent where as Rajasthan registered a decline of 2 per cent.

"The prices should have been around Rs 2,300-2,400 per quintal, but because of companies like Cargill and ITC (which stored up considerable quantity), the prices are shooting up to Rs 2,600 per quintal.

The prices depend on how much stock is released by these companies. Futures market is also responsible for such high prices," said Ajay Kumar, another Delhi-based chana trader.

Commodities analysts said the demand of chana would remain above 4 lakh tonne for the next 5 months. Imports from Australia is expected to reach India by January.

In Madhya Pradesh, sources said many farmers have diverted to Kabuli chana causing fall in the reduction of production.

"Kabuli chana being a profitable cash crop, farmers in Madhya Pradesh have diverted from chana to it. There is a steep decline of 3-5 lakh tonne in chana production this year because of the diversion in the state," said Prakash Vohra, an Indore-based chana trader.

He added that it would not be a surprise if prices surpass the barrier of Rs 3,000 per quintal.

In Delhi, the present stock is reported to be around 1 lakh bags (each bag of 100 kg) which makes it around 10,000 tonne of chana. Festive season in the capital is believed to be robust and the supply are not in line with the demand.