Chana Futures may continue to trade lower: Angel Comm

Angel Commodities has come out with its report on Chana. According to the research firm, Chana Futures is expected to continue to trade lower as arrivals pressure will gradually increase in the coming weeks.

Increasing arrivals of new crop led Chana prices to decline further on Tuesday. Spot as well as the Futures settled 1.94% and 0.67% lower respectively on Wednesday.  Ongoing arrivals of new crop in Karnataka and AP alnongwith commencement of harvesting in Maharashtra and UP have increased supplies of chana in the local markets.  Total pulses acreage as on 01 Feb 2013 stood at 144.49 lakh ha, down by 0.9% yoy.  Chana sowing is however, up by 4% at 93.20 lakh ha. 91.9 lakh ha, up by 3.4% as on 18th Jan.  Chana acreage is marginally higher by 3% this year in Rajasthan at 14.80 lakh ha, In Maharashtra, Chana acreage is up at 10.92 lakh ha as on 11th Jan 2013 vs normal area of 10.6 lakh ha and 2012 area of 7.04 lakh ha. While in AP it is up at 7.14 lakh ha as on 11th Jan 2013, up by 26%. (Source: State farm dept).

With some delay, arrivals have finally commenced in Maharashtra. New chana crop commenced at Jalgaon, traded at Rs.3500/Qtl, the new crop contain 13% moisture.  Although Farm ministry has targeted 7.9 mn tn Chana output for 2012-13 season, higher compared to 7.58 mn tn in 2011-12, the final output would depend on the weather conditions in the major growing regions.  According to the first advance estimates of 2012-13 season, kharif pulses output is estimated lower by 14.6% at 5.26 million tonnes compared with 6.16 mn tn last year.  The Commission for Agriculture Costs and Prices (CACP) has suggested 10 per cent import duty on pulses to encourage domestic production. in the first six months of the new fiscal that is from April to September this year, imports were an estimated 12 lakh tonnes.

Outlook:  Chana Futures is expected to continue to trade lower as arrivals pressure will gradually increase in the coming weeks.  Also, higher output of Chana in other producing countries like Australia and Canada is expected to support the weak market sentiments.

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