Chana prices may soon breach the MSP level of Rs 4,400. This is because the traditional festival season will commence from August and festive season demand would emerge now.
We are in the midst of the four-month monsoon season and almost 70 percent of the average areas under kharif crops have been covered by July 27. Sowing activity picked up pace in North India as rainfall improved last week.
In the last week, many kharif grown commodities remained under the bear grip while few spices, cottonseed, oilcake and castor seed posted decent gains.
Among the top gainers was coriander posting a whopping 6.7 percent gains followed by Jeera (5.1 percent), castor seed (2.2 percent) and cotton seed oilcake (1.8 percent).
Jeera has been consistently trading higher as exports have seen robust growth during the first four months of FY18-19. Coriander prices witnessed a sharp rebound last week as supplies tightened in the physical markets due to lower prices. Castor seed made new contract high last week on account of strong export numbers.
Among the top losers were chana, posting more than 3 percent losses, Guar, oilseeds and edible oil complex. Sowing prospects increased with improved rainfall activity and this led to fall in soybean, cotton and guar complex. Fall in chana and mustard seed was largely attributed to the government’s decision to liquidate procured stocks of the commodities in the open market.
In case of the mustard seed, the government has directed NAFED to submit proposal on sale of the procured stocks within 3 days based on the market rates and sown area of other oilseeds. While in case of chana, there is still no clarity as to when and how much quantity will be released from the new stock.
A top loser of the last week, chana, may, however, turn out to be the gainer this week. Chana prices may soon breach the MSP level of Rs 4,400. This is because the traditional festival season will commence from August and festive season demand would emerge now. Also, supplies are gradually tightening and imports are also not viable due to higher tariffs. All these factors would push chana prices higher.
