Prices of agricultural commodities tend to fall during peak arrivals. However, the price of chana (chickpea/Bengal gram), the lone pulse traded on the futures, started rising in February.

Chana prices have jumped more than 24 per cent to ₹5,060 a quintal from ₹4,060 levels.

Earlier in the season, chana prices were under pressure due to reports of good sowing coupled with a higher production forecast on better climatic conditions in chana growing States.

Moreover, sufficient imports, anti-hoarding measures and stock limits are exerting pressure on prices.

Record imports

In December 2015, import duty on chana was extended by the Centre to ensure to ensure availability during the sowing season. According to the latest government data, the country has imported over 9.13 lakh tonnes (lt) of the pulse during the April-January period of 2015-16 – 152 per cent more than the corresponding period last year.

In 2015-16, chana imports touched a record high, surpassing the previous record of 7 lt in 2012-13. Moreover, imports in December 2015 and January 2016 were more than 5.37 lt — again a record for a consecutive two-month period.

During the current marketing year, more than 71 per cent or 6.5 lt of chana was imported from Australia followed by 1.65 lt from Russia. Tanzania, Ethiopia, Myanmar and Canada are the other countries that shipped chana to India. This rise in imports failed to check the price, as the imports were expensive due to the 6.2 per cent depreciation of the rupee against the dollar between October 2015 and February 2016.

Chickpea prices in Australia touched new highs this year due to high demand from India as dry weather threatened production for the second successive year. Prices are reported to have touched more than A$1,100 a tonne and are expected to average A$870 a tonne in 2015-16.

The government, in its Second Advance Estimates for production of major crops, in February 2016, estimated the output of chana at 8.09 lt – 10 per cent higher compared to last season on a larger sowing area and better climatic conditions.

However, in March, rains accompanied by strong winds and hailstorms across North and North-West India have flattened chickpea and other crops while there are also reports of damage in Maharashtra. Thus, trade sources are expecting a 15-20 per cent dip in production.

Price outlook

Recently, chana prices moved up on fear of lower-than-expected production coupled with high domestic demand from the food industry.

Moreover, procurement by the Centre for buffer stocks added to the bullish trend in chana. Thus, we expect the prices to touch a record ₹5,425 a quintal, as seen in November 2015.

The writer is Associate Director – Commodities & Currencies Business, Equity Research & Advisory – Angel Broking. Views are personal.

Related Topics