Chana spot, futures to dip on fresh arrivals

Chana (chickpea) prices in the spot and futures markets are expected to decline by 20 per cent and 10 per cent, respectively, by the end of March owing to oversupply from Delhi and Rajasthan.

Presently, spot chana is quoted at Rs 1,950 per quintal in Delhi. Chana in Madhya Pradesh is sold between Rs 1,775 and 1,780 per quintal.

About 3,000 tonne of chana has already started arriving in the Madhya Pradesh market which is expected to rise to 10,000 tonne by the beginning of March.

Maharashtra has witnessed a bumper crop this season and is all set to route chana supplies to mandis. Arrivals from Rajasthan begin in the first week of April and Uttar Pradesh would begin supplies by the end of the current month.

The total output this year is pegged at 55,000-60,000 tonne. Spot chana prices in Madhya Pradesh are expected to decline dramatically to the lower levels at Rs 1650 per quintal towards the end of the current month.

The actual impact of the current production year and supply tightness in the recent past could be assesed in the first week of April when chana supplies begin from Rajasthan.

Spot prices of the commodity gained 7 per cent in February at the National Commodity & Derivatives Exchange Ltd (NCDEX) after witnessing a dip in January.

Currently, spot chana is quoted at Rs 1,980 per quintal as compared with Rs 1,849 per quintal on February 1 and Rs 2,042 per quintal on January 2.

The current price rise is mainly attributed to the rumors of weather disrurbance and crop losses in Rajasthan. In January, this year, spot chana prices dipped by Rs 200 to close at Rs 1820 per quintal despite.

Miraculously, chana opened Rs 30 higher the following day owing to fresh booking from stockists. In fact, depleting stocks in January evoked fears among traders threatening the availability till the new produce hits the market.

The chana market would see a price decline of only 5 per cent, a section of trader believes, as the oversupply would be compensated with rising demand.

February futures for chana on Multi Commodity Exchange of India (MCX gained Rs 180 in February to Rs 1,933 per quintal.

The country accounts for just 2/3rd of the world's chickpea production and imports around 5-6 lakh tonne of chana annually from Canada, Australia, Iran and Myanmar.