Chana Falls On Higher Arrivals.

Spot prices of Chana after trading bearish bounced back and settled 0.45% higher due to slight improvement in demand at lower levels. However, futures continued to trade bearish and settled 0.32% lower anticipating increase in the arrivals in the coming weeks.

Harvesting of Chana has commenced in Rajasthan, the second largest Chana producing state in India after MP. We expect arrivals from Rajasthan to peak up very soon once the arrivals from Bikaner start hitting the markets by weekend.

Government of India had extended the ban on exports of pulses till March 2012 to curb inflation. Pulses contribute 0.72% in the WPI .

India requires to import 3.4 mn tonne pulses in 2011-12 (PTI) The production of pulses during 2011-12 as per the Second Advance Estimates released by Union Agriculture minister is estimated to be 16.51 million tonne, Food minister K V Thomas said in a written reply in Lok Sabha.

Notwithstanding expected bumper production of pulses during 2011-12, India would require to import 3.40 million tonne of the vital foodgrain item to match the enhanced demand.

Planning Commission has estimated that the demand for pulses in the country during the period is 19.11 million tonne.

Production and Acreage

Fresh arrivals of Chana from Rajasthan have commenced and stood around 30,000 bags yesterday.

According to the second advance estimates on crop released on Wednesday 9th February ,2011 by agriculture ministry, Chana output is estimated at 7.37 million tonnes (mt), compared to 7.48 mt in the previous year. The output of pulses is forecasted to increase 13.2% to 16.51 million tonnes.

Globally, Canadian Chickpeas output is expected to increase during 2010-11 to 1.28 lakh tonnes compared to 0.76 lakh tonnes the previous year.

Outlook

We expect chana prices to trade down in anticipation of increase in fresh arrivals in the domestic mandi particularly Rajasthan. In the short to medium term price trend would depend on the pace of arrivals and the as actual production estimates of Rabi Pulses. We expect March contract to trade in the range of Rs. 2400 – 2600 per qtl levels.

Source : commodityonline.com