Urad prices to decline on renewed supply

Urad may set off its 10-day gain when arrivals from all corners of the country resume in full swing next week. Currently, the supply has halved due to public holidays in producing centres.

"At present, the arrivals are approximately 3,000 tonne, which are set to double next week once traders come backfrom holidays, resulting in a probable price decline," a Jalgaon-based trader said. "The prices will decline by 10 per cent next week," he added.

Spot desi urad perked up by 5.5 per cent in the last 10 days on supply constraints due to market holidays and festivals. Spot urad on Monday closed at Rs 3,900 per quintal compared with Rs 3,707 per quintal on October 13. Similarly, Burmese urad also firmed up marginally, but closed at Rs 3,925 from Rs 3,900.

Desi urad futures witnessed less volatility on both the national exchanges "� NCDEX and MCX. On the MCX, the November deliveries closed on Monday at Rs 3,800 per quintal compared with Rs 3,752 per quintal 10 days ago. On the NCDEX, desi urad closed on Monday at Rs 3,802 per quintal compared with Rs 3,723 per quintal on October 13.

Diwali demand, which started 10 days ago, amid volatility, continued till the beginning of this week. The major impact on the prices was the stock limit imposed by the Maharashtra government, coupled with the shortage of the imported varieties. By the next week, the prices will go down with the supply resumption, traders said.

Supply is expected to resume in full swing soon from Gujarat, Madhya Pradesh and Jharkhand. Despite the 50 per cent damage suffered by Maharashtra due to unseasonal rains, the state , which accounts for 20 per cent of the country's production, is expecting a bumper crop.

Sources said frequent rains at the time of flowering and ripening of the crop have damaged the quality of urad immensely. A section of traders also said unseasonal rains have hit the quality of urad as crops were submerged in rain water.

According to industry estimates, India's total urad production is expected to remain rangebound at around 11 lakh tonne.

"Urad prices are mainly influenced by traders in Jalgaon. When the price was ruling at Rs 3,200 per quintal, Jalgaon-based traders bought aggressively, thereby, lifting the price dramatically up to the level of Rs 3,700 per quintal," said an analyst with agriwatch.com, a commodity portal based in Delhi.