Bullish futures may push up barley

Barley prices could increase in the coming months going by the trend of futures contract at leading agri commodity exchange National Commodity and Derivatives Exchange of India (NCDEX).

The July contract of barley at NCDEX is currently quoted at Rs 785 per quintal, while August delivery is quoted at Rs 797 a quintal, September Rs 811 per quintal and October Rs 822 per quintal.

The July contract of barley has been moving in the range of Rs 780-90 in the past fortnight except on June 12 when it reached at Rs 814. The contract opened at Rs 798 per quintal when launched in February.

"Even if there is a correction, prices are expected to be in the range of Rs 800 per quintal," a commodity analyst said.

The spot prices, however, recovered marginally to Rs 732 per quintal on June 16 from Rs 727 a quintal on June 1, 2007. Still, it is short of Rs 47 compared to Rs 779 per quintal recorded on the first day of May.

"Lesser production than demand is the main reason for the increase in prices," a Jaipur-based barley trader said, adding farmers are shifting to more lucrative crops in spite of rising prices of barley.

The production of barley is likely to touch 1.34 million in 2006-07 season, up by 10 per cent from 1.22 million tonne in the previous year.

However, the increased output falls shot of the government target of 1.65 million tonne.

Barley, grown during the rabi season, is mainly used as an animal feed in the country.