Chana Prices Outlook Turns Bearish on Increased Supply by Amit Gupta, Kedia Advisory
Chana prices are showing a bearish trend due to rising domestic arrivals and an increase in imports, particularly from Australia. The new crop from Karnataka and Maharashtra markets is being traded below the Minimum Support Price (MSP) level, exerting pressure on prices. The surge in yellow pea imports, which serve as a substitute, is further impacting demand. With higher acreage and favorable climatic conditions for the crop, production is expected to rise. The Ministry of Agriculture has approved the purchase of chana under the price support scheme in Karnataka to support farmers.
Key Highlights
* Chana prices are trending lower, hovering around ?5,500-6,300 per quintal.
* Rising imports, especially from Australia, are increasing pressure on prices.
* The domestic chana crop is benefiting from higher acreage and favorable climate.
* Imports of yellow peas are impacting chana demand.
* The Ministry of Agriculture approved a price support scheme for chana in Karnataka.
Chana prices are facing downward pressure, currently trading between Rs.5,500 and Rs.6,300 per quintal, following the arrival of the new crop in Karnataka and Maharashtra markets. These prices are hovering around or even below the Minimum Support Price (MSP) level of Rs.5,650 per quintal, signaling a bearish outlook for the ongoing marketing season. The increase in domestic arrivals, combined with the rising imports, particularly from Australia, is weighing heavily on the price performance of chana.
The agricultural data indicates that chana acreage has risen by 2.8% in the ongoing rabi season, further contributing to the abundant supply. The influx of yellow peas, which are often used as a substitute for chana, is another factor that is dampening demand. Imports of yellow peas have surged due to favorable policies allowing duty-free imports, and the abundance of yellow peas is negatively impacting the demand for chana.
The situation is exacerbated by a sharp rise in chana imports from Australia, which has seen an increase of over 400% compared to the previous year. Australia’s chana exports to India are expected to account for around 80-85% of its total exports. Despite these bearish trends, some relief is expected for growers, as the Ministry of Agriculture has approved the purchase of 96,498 tonnes of chana under the price support scheme in Karnataka.
Finally
Chana prices are likely to remain under pressure due to higher domestic production, increased imports, and the availability of yellow peas, although the price support scheme could offer some relief to farmers.
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