Progress of monsoon to determine pulses price

The prices of pulses, spot as well as futures, will be determined by the progress of the monsoon. This week is most crucial, as sowing can take place only if there is adequate rainfall, analysts and traders said.

"Normally, sowing of pulses is done after two good spells of rainfall. Even the first spell was not adequate till Monday in pulses-growing states like Tamil Nadu, Andhra Pradesh, Karnataka, Madhya Pradesh, Rajasthan, Gujarat, Maharashtra and parts of Uttar Pradesh," said Neeraj Shukla, chief analyst, Angel Commodities.

As a result, June, July, and August urad or black matpe futures rose sharply while tur or pigeon pea, chana or chick pea, and urad or black matpe contracts also went up slightly today on National Commodity and Derivatives Exchange of India.

"The rise in futures was an offshoot of higher demand in anticipation of higher spot prices if there is any further delay in rainfall," a trader said.

Pulses spot and futures prices are expected to rise further this week, as the official weather forecast on Sunday indicated that it will be nearly a week before southwest monsoon advances fully towards central and western India.

"Spot and, resultantly, futures prices of pulses are expected to go up marginally also because of the recent hike in diesel price, that will increase the transportation cost," another trader said.

Hiren Sanghavi, a trader, said the uncertainty regarding the monsoon is bound to encourage speculative buying in spot and futures.

"For instance, I, as a trader, would like to buy June chana stock at today's price, Rs 2,527 per quintal at 1615 IST, since I see it rising to around Rs 2,650 very soon if the dry spell continues in Rajasthan and Madhya Pradesh, the two leading chana cultivating states," he said.

Some importers and traders expect tur and urad prices to come down due to import duty exemption on pulses. However, its benefit may not be felt this week because no shipment is expected from Myanmar.