NCDEX Chana Settles Higher On Firm Spot Demand: April 23, 2012

Demand from the local stockists amidst recommendation of possible rise in the MSP of kharif pulses led chana spot prices on Friday to continue its upward move and settled 1.58% higher. CACP has recommended 25% hike in kharif pulses in tur and urad.  

The recommended minimum support price is around 4125 per quintal for urad and 4375 per quintal for moong. In addition to this, improved physical buying at lower levels also supported the positive sentiments. 

Arrivals in Rajasthan began over the last 2-3 weeks, however, the pace is  very slow on account of sharp drop in yields and thereby output in Rajasthan, the second largest chana producing state. During the current season, despite of peak arrival period, prices are not declining much as supplies are comparatively lower on the back of lower output, while demand seems to be very strong. 

As per the NCDEX circular dated 11th April, Initial Margin (IM) of 10 % of  the value of contract or VaR based margin whichever is higher will be  imposed on all contracts and yet to be launched contracts of chana with  effect from beginning of the day Thursday April 12, 2012. 

To curb excess volatility in prices, government has also imposed special  margin on chana and has cut position limits last week. Demand Supply Scenario shows the import of pulses is likely to cross three million tonnes this fiscal due  to growing demand, country's apex body of pulses industry and trade  said on Wednesday, 4th  April.  

According to Second Advance estimates, pulses output is expected to fall by 5.26% to 17.29 mln tonnes as compared to 18.24 mln tonnes in 2010- 11. Chana production is expected to decline by 6.8% to 7.66 mln tonnes  as compared to 8.22 million tonnes in the last year.   

As output is likely to decline, India's pulses imports in 2011-12 (Apr-Mar)  may rise nearly 10% from 2.75 mln tn in the previous year. India's  consumption of pulses is on the rise with an annual growth of around 5% but production is seen lower, which may lead to increase in imports this  year.  

Around 74% of Indian chickpea imports come from Australia. However, despite increase in Australian chickpea production in 2011-12, lower carryover stocks and increasing domestic consumption may lead to 18% decline in chickpea exports from Australia in 2011-12.