Chana prices may rise on inventory build-up

Despite higher output estimates, chickpea (chana) prices may rise towards the end of kharif season on traders stockpiling for sale in the lean season.

Generally, traders build their inventory during crop harvesting season for the commodity’s sale at higher price.

Two-three months down the line farmers generally, evacuate their holdings by selling commodities cheap due to mounting pressure of farm loans coupled with the fear of spoilage due to the lack of storage facility.

As a normal practice, farmers avail loan from local lenders during sowing of agriculture commodities and repay while harvesting.

“As chickpea arrivals started in Madhya Pradesh last week, traders are eyeing this variety of pulses as a means of profit making towards the end of July-August, the time of kharif sowing.

The prices of other pulses are rising, traders see hardly any room for making money there. Therefore, we estimate prices to start rising after May,” said Pradeep Jindal, joint secretary of the Pulses Importers Association (PIA) and a large trader of chickpea in Jalgaon.
 

Production of pulses (in MT)
Year	Kharif	Rabi	Total
2003-04	6.17	8.74	14.91
2004-05	4.72	8.41	13.13
2005-06	4.87	8.52	13.39
2006-07	4.8	9.4	14.2
2007-08	6.45	8.66	15.11
2008-09	-	-	15.15*
* Estimated               Source: Ministry of Agriculture

Prices of lentils, black matpe and green peas are mounting, thereby leaving little room to rise further. Hence, traders do not want to burn their fingers in these pulses, Jindal said. PIA estimates total chickpea output during 2008-09 to rise about half a million tonnes (11.11 per cent) to 5 million tonnes (MT).

The output which was affected by the bad weather in Madhya Pradesh, Andhra Pradesh and Karnataka would be compensated by favourable climatic condition in Uttar Pradesh and Rajasthan, thereby raising overall yield of the country this year.

Especially, Rajasthan is likely to witness a record chickpea output this year to the tune of one million tonnes as compared to 400,000 tonnes last year. The agriculture ministry, however, forecast chickpea production to rise 13.7 per cent to 6.54 million tonnes during 2008-09 as compared to 5.75 million tonnes a year ago. Meanwhile, chickpea prices are likely to ease or remain rangebound till April.

According to K C Bharatiya, president of PIA, India’s total pulses output may remain in the same range as it was last year to the tune of 15.11 million tonnes. Still, the country would require three million tonnes of imported pulses to meet the growing domestic demand up to 18 million tonnes this year.