Chana weak on carryover stocks

Chana futures are likely to remain weak in the next five-six days on high carryover stocks, and as acreage has nearly equalled the year-ago level, analysts said.

Start of arrivals at key markets in Karnataka and some parts of Maharashtra is also likely to pressurise chana prices, they said.

"February chana contract on National Commodity and Derivatives Exchange is likely to test levels of to Rs 2,125 per 100 kg, and Rs 2,110 in this week," said Chowda Reddy, research analyst, Karvy Comtrade.

Prices will remain weak as chana acreage, which was initially lagging, has nearly caught up with the year-ago figure, Reddy said. Chana acreage until Thursday was 7.5 million hectares compared with 7.6 million hectares for the same period a year ago, government data released Friday showed.

"This has put to rest the speculation of lower acreage," Reddy said. Prices are also seen weak in the coming days due to high stocks from the last season's crop, said Yogendra Singh, analyst, Religare Commodities.

Trade estimates show around 1 mln bags (1 bag=100 kg) of chana are still with stockists, of which 100,000 bags are in Rajasthan and Delhi, respectively, and the rest is in Madhya Pradesh, Singh said.

Singh expects NCDEX February chana contract to decline to Rs 2,130 per 100 kg in this week. Arrivals have already started at Gulbarga in Karnataka and some parts of Maharashtra, and will pick up in the second week of January, which is likely to weigh on chana futures, both Reddy and Singh said.

Spot prices are likely to fall further on rising supplies both from the fresh crop as well as old stocks, Reddy said. Delhi spot chana can decline to Rs 2,100 per 100 kg from the current level of Rs 2,080, he added.

Also, since overall demand for pulses is likely to remain weak, spot prices will ease on lack of buying by millers, he said.