Urad futures surge 9% on demand-supply gap

Urad futures rose more than 9 per cent in the last three trading sessions owing to low supply in the physical markets and crop damage due to the floods.

"The mismatch between the demand and supply is making the market bullish," said a Mumbai-based commodities analyst. He added that the market would soon see a 30 per cent correction.

The near-month contract on National Commodity & Derivatives Exchange (NCDEX) rose by over 4 per cent from Rs 3,140 a quintal last week to Rs 3,291 a quintal in the Tuesday trading, whereas the October and November contracts saw a jump of over Rs 230 and Rs 246 a quintal respectively "" that is over 8 per cent.

On Multi Commodity Exchange (MCX), the October and November contracts surged by 9 per cent (Rs 260) and over 11 per cent (Rs 311) respectively from last week.

"Except for Indore, the crop is yet to arrive in the markets across the country. Arrivals will start only after another two week," said Rajendra Agarwal, a Satna-based trader.

In the Maharashtra and Karnataka mandis the arrival is weak. According to market sources the stock in the two states is around 12,000 bags (each of 100 kg). Floods have damaged around 20 per cent of the crop in the states. In Latur, the arrival is around 2,000 bags a day and in Gulbarga it is 1,500 bags.

"Nomally, the arrival is around 5,000 to 10,000 bags a day. This time it has fallen to as low as 1,500 bags," said a Latur-based trader.

The production in the area is one-fourth of the usual. Currently, the production has gone down from 4 bags per acre to 1 bag per acre. In Latur the price is hovering between Rs 3,650 and Rs 3,750 a quintal, he added.

Market experts believe the bullish sentiments in the market may disappear in 10 days on the pressure of arrival.