Chana futures have seen a huge volatility in the last two weeks. After commodity futures market regulator, the Forward Markets Commission (FMC), imposed a 10 per cent margin on buy-side trades (futures), prices crashed 15 per cent. In the spot market, prices are higher compared to futures.
However, prices are now stabilising and imported containers of chana (chickpeas) and other pulses have started coming in, resulting in softening of spot prices. However, prices in the spot market have fallen only by 10 per cent during the period.
Chana prices were rising in futures, but there were wide-scale complaints that speculators are rigging prices. Although chana’s availability was a concern, there were some fundamentals that were pushing prices.
The sharp jump in futures, that was putting rising pressure on prices in the physical market, prompted FMC to ask exchanges, mainly NCDEX, to impose 10 per cent margin on chana buying on September 28 and since then prices have crashed almost 20 per cent.
Futures prices came down from high of Rs 3,661 a quintal on September 27 to Rs 3,097 a quintal (down 15.4 per cent) yesterday and in spot market, prices have come down from Rs 3,625 to Rs 3,258 a quintal (down 10.1 per cent) during the same period.
“However, high prices of chana will incentivise farmers to increase acreage under the crop when sowing for the next rabi season begins after Diwali,” said Bimal Kothari, vice-president of India Pulses and Grains Association, an apex body of pulses industry and trade.
Chana is majorly a rabi crop. A trader with a multinational trading company, which also imports pulses in India said, “Sharp fall in futures prices was due to high margin and after that huge mark-to-market losses let to selling. Futures prices have not fallen so sharply due to supply constraints.”
The Rajasthan government has also tightened stock limits for chana, leading to correction in prices including on futures exchanges.
New chana crop will enter markets in early February and till then, India will need one million tonnes to meet the consumption, where half of that is being met by imports. As supply from imports starts coming in, spot prices will also converge with futures, the trader said. On Wednesday, prices went up by almost two per cent in futures and physical market.