Chana Rises on Firm Demand

Demand from the local stockiests ahead of festivals and lower stocks in the major mandi provided support to the prices and settled 4.40% and 2.89% higher w-w. Reports of lower area under pulses in M.P by 36% also provided support to the prices. However, area under Chana in M.P. is up 23%. This is likely to cap sharp gains.

Government announced Support price for Rabi crops 25th October 2011. Chana MSP has been raised by Rs.700/qtl to Rs.2,800/qtl a rise of 38%. As per the latest release of the Rajasthan Agriculture department, 5 lakh hectares has been covered under Chana cultivation as on 25th October 2011. The government has set the target of 17 lakh hectares for 2011-12. In Maharashtra area sown under Chana cultivation stands around 18,000 hectares till 21st October 2011.

Government’s contingency plan for additional production of pulses in Rabi 2011-12 to overcome the losses of Kharif Pulses also supported the bearish market sentiments.

In the contingency plan, Government has targeted to achieve an additional production of 2.78 million tonnes during the ensuing Rabi season through area expansion and productivity enhancement.

Additional allocation of Rs. 80 crore has been made for this purpose under NFSM- Pulses program.

Pulses Imports

Imports have declined dramatically in the current FY 2011-12 with India's state-owned trading agencies having contracted imports of only 121,660 tn pulses since the beginning of the current financial year till September 12, 2011 compared with 596,700 tn during the same period last year.

Imports have been weak because domestic pulses output in 2010-11 (Jul- Jun) was at an all time high of 18.09 mln tn, up 23percent from a year ago. Also, the Centre has abolished one of the reimbursement schemes for the state-owned importing agencies.

Sowing Progress and Production

Indian government is targeting total pulses output of 17 mln tn in the current crop year that started July 2011, down marginally from last year's record production of 18.09 mln tn.

According to the Indian Agricultural department production of Rabi pulses is projected 4.8% lower to 10.27 mt as compared to 10.79 mt in the previous year. Chana is the main Rabi Pulse crop grown in India, sowing of which is done during October-December, and harvesting begins in January.

According to the first advance estimates, Kharif Pulses output for 2011- 12 season is down by 9.6% at 6.43 mt. Tur output estimates is up by 0.35% while moong & Urad is down by 21% & 16% respectively. Kharif Pulses sowing is down by 9% as on 23rd September, 2011. 109.41 lakh ha has been covered against 120.3 lakh ha in the last year.