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Chana prices fall as govt offloads stock, analysts divided over outlook of futures market

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NEW DELHI: Chana prices have fallen by 2.3 per cent in the past 10 days after rising 23 per cent since July as the government auctioned over 3 lakh tonnes of the pulse from its stock in the open market, but analysts were divided about the outlook in the futures market..

The September contract for chana on NCDEX had touched a high of Rs 5038 per quintal on September 1 on the NCDEX after seeing a low of Rs 4094 per quintal since July 28, said Ajay Kedia, director at Kedia advisory.

“In the medium run, we expect prices to be weak due to expectations of higher sowing, though in the short term, the market will remain volatile and trade between Rs 4700-Rs 5100 a quintal,” he said.

Lack of demand by companies at higher prices will result in prices coming down in the short term towards Rs 4800 per quintal of 100 kg, said Prerana Desai, head of research at Edelweiss Rural and Corporate Services.

She added that in the medium term there could be a temporary bounce before Diwali season but higher rabi acreage due to ample water availability and farmer selling post sowing will bring prices lower towards Rs 4500 per quintal.

However, Ashwini Bansod, research analyst, Phillip Capital said, with the new season harvest four to five months away, peas imports restricted and September to early November time frame seeing festival related demand, it will support chana price.

The government will ensure that prices don’t spike or drop below the minimum support prices of Rs 4875 per quintal, said Bimal Kothari, vice chairman of Indian Pulses and Grains Association. “With National Agricultural Cooperative Marketing Federation (Nafed) holding a huge stock and offloading it in the open market we expect prices to be at Rs 5000 to Rs 5500 per quintal in the coming days, ” he said.

According to traders, Nafed is selling in the open market to meet industry demand with tenders of over three lakh tonne for sale of chana out of the 21.5 lakh tonne it had procured this year. Nafed has also distributed chana under the Pradhan Mantri Garib Kalyan Anna Yojana.

“It has created a separate demand segment, driving the market to the MSP level of Rs 4875 per quintal. This will enthuse the chana farmers for additional sowing and stabilise the pulse market,” said Sunil Kumar Singh, additional MD, Nafed.

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