Urad surges on output blues

Urad hit the upward circuit for the second day in a row on Tuesday, following reports of crop damage in the major producing regions.

Traders in Jalgaon, the heart of pulses trading in Maharashtra, expect the prices to rise by at least 10 per cent by the weekend.

The November contracts on Multi Commodity Exchange (MCX) hit the upward circuit of 6 per cent to close at Rs 3,504 a quintal, a similar gain recorded on Monday.

The near-month contracts, expiring on Wednesday, surged 4 per cent to touch a higher price at Rs 4,052 a quintal. October contracts, however, were range-bound, with the prices gaining just 2.5 per cent to remain at Rs 3,631 a quintal.

In contrast, tur hit the downward circuit closing at Rs 1,594 a quintal on Tuesday. The prices continued to be sluggish, owing to the absence of major buyers. Yet, there was some profit-booking even at the lower levels, forcing prices to decline further.

"I see no reason why tur and urad prices are moving in opposite direction though the fundamentals of both the pulses are more or less the same," a trader said.

In the Mumbai spot market, urad surged 18 per cent from Rs 3,387 a tonne on September 1 to Rs 4,000 a tonne on September 19. Urad for the near-month contracts gained 27 per cent to Rs 3,981 a quintal on September 19 from Rs 3,034 a quintal on September 1.

Traders are anticipating about 25 per cent crop loss this year in the major producing regions, including Maharashtra, Karnataka, Andhra Pradesh, Gujarat, Rajasthan and Madhya Pradesh, following heavy rains in the beginning of the flowering season.

Traders in Jalgaon have reduced their activity to 'zero carry forward stocks' (daily trade) due to high volatility in spot and futures prices and unclear government policies.

"We have cut down our activities massively, as price changes every minute in a wide range. There is always fear of loss in pulses trade on Tuesday," a Mumbai-based trader said.

A ship containing total pulses of more than 11,454 tonne is expected to touch a domestic port soon.