Agri markets stayed in a recovery mode. As demand gradually increased at lower levels after the recent dips, trend firmed up. Firmness in international markets, too, supported the Indian market as oil complex, cotton and kapas firmed up.
Erratic monsoon—excessive rain leading to floods and deficient in other parts-- in some areas is leading to apprehensions of crop damage in some parts of the country.
Demand on the domestic front ahead of the festival season, and a gradual rise in exports (aided by a firm dollar) can support prices this week, as most agri-counters look to find support at these levels.
The recent dips in chana prices were on account of reports of sale by Nafed in the open market amid reports of sowing area improving for the kharif Pulses.
Prices, however, seem to have found strong psychological support at the Rs 4,000 per quintal mark for August contract in the futures market.
Higher sowing figures for kharif pulses and good monsoon had pressurized prices. Reports of Nafed likely selling chana in the open market, too, kept prices weak. But with farmers preferring it to sell at procurement centres at MSP, arrivals may fall.
Higher government procurement may support prices as it is reportedly targeting to procure 2 million MT of Chickpeas for the year, nearly 20 percent of total production.
The government has extended the timeline of procurement in states like Madhya Pradesh and Maharashtra. As lockdown restrictions are rolled back, demand from millers is growing on the back of improvement in transport and resumption of more units.
The government’s decision to extend free ration to November could lead to higher procurement by agencies, supporting prices. As prices trade below the MSP of Rs 4,875 per quintal, and the government is taking steps to benefit farmers by raising their field of operations to get better rates, this remains a bullish factor for chana in the long term.
The changes in the Essential Commodities Act, too, is a supporting factor, as higher demand from stockists is expected.
Higher production estimates, however, have kept the uptrend limited. As per third advanced estimates, the production of pulses during 2019-20 is pegged at 23.01 million tonnes versus 22.08 million tonnes in 2018-19.
Chana production is estimated at 10.90 million tonnes against 9.94 million tonnes in 2018-19.
Chana acreage, as per the latest reports, has risen to 107.21 lakh hectare versus 96.19 lakh hectare in the same period in 2019.
The rise in MSP had seen production rise gradually over the last few years. As per APEDA reports, pulse exports for April-September 19-20 have fallen to 1.18 lakh MT from 2.89 lakh MT in 2018-19 the same period.
Limits put on exports of pulses have prevented strong recovery in 2019. Imports, too, have fallen drastically to 8.16 lakh tonnes in 2018-19 versus 56.76 lakh tonnes in 2017-18 due to high stocks.
As per latest ABARES report, Australian chickpea production is forecast to rise 2.48 percent in 19-20 to 2.89 lakh tonnes as compared to 2.82 lakh tonnes in 2018-19.
Overall, sentiment looks moderately firm for chana and with festival season approaching, the demand for the commodity is expected to rise in the coming weeks.
Support for August contract remains at Rs 4,000 per quintal levels. Immediate resistance is seen at Rs 4,130 per quintal, above which it can rise to Rs 4,200 levels.
Source:- moneycontrol.com