Turmoil in Rajasthan leads to supply squeeze

Prices of chana, barley and guarseed rise by Rs 30.

If the unrest in Rajasthan stretches any longer, prices of some commodities such as chana, barley and guarseed could leap as restricted movement of goods and squeezing supply may start showing its impact.

In less than a week, prices of these commodities have risen by around Rs 20-30 a quintal in the spot markets. Though market sources do not relate the hike directly with the spreading turmoil, they admitted that the market would not remain isolated for long.

"The futures market is already reflecting the situation. Spot market would join soon," said an analyst with Agriwatch Commodities.

In Bikaner, the spot rates of guarseed touched Rs 1,760 a quintal, which a few days ago was at Rs 1,735. In Jodhpur the current spot rates are ruling at Rs 1,885 a quintal. Navratan Daga, a Bikaner-based guarseed trader said bullishness was expected in the market. Similarly, spot rates of barley in Jaipur rose Rs 25 to Rs 675 a quintal.

"Barley market is going to be bullish," said Abhishek Agarwal, a Jaipur-based trader. Currently, we are getting 400-600 bags (each of 80 kg), he added. During April-May, the main arrival season, the supply even touched 10,000 bags a day. Sources said that in spite of abundant stock, the continuing turmoil in Rajasthan could impact the market. "If it stretches, we will face the brunt," said Agarwal.

Rajasthan supplies chana to the northern India, mainly Delhi. The last three days have seen a decline in supply from 500 tonnes to 350 tonnes a day.

The spot rates in the capital have gone up from Rs 2,200 to Rs 2,225 a quintal. "So far, there is no major impact. But from Monday, there could be. If supply gets further constrained, a further rise of Rs 24-50 a quintal in the spot markets is on the cards," said commodity analysts.

On the National Commodity and Derivatives Exchange (Ncdex), the near month contract of barley closed at Rs 772 a quintal, down 0.77per cent compared with the last week's closing price of Rs 778.

Similarly, guarseed and chana slipped by 0.50 per cent and 0.40 per cent respectively to Rs 1,790 and Rs 2,236 a quintal.