Chana supply expected to go up from September

NEW DELHI: Chana prices have remained firm amid low supply and robust demand, but the industry expects supply to increase by September-October when new crop arrives from Tanzania and Ethiopia, followed by Australian crop. In Delhi’s wholesale market, chana prices were at Rs 90 a kg on Wednesday, an increase of 7% in a week. In retail, chana was competing with arhar, which was priced at Rs 130-150 a kg.

The spike in chana prices comes after an at least 15% dip in production last year and 25% the year before, said Pravin Dongre, chairman of Indian Pulses and Grain Association. He said India imported almost all the chana that was available internationally, with imports doubling in October 2015-January 2016 over that of a year ago, so there was no more availability globally to import to meet the demand and shortfall.

India imported more than 8 lakh tonnes of chana during this period, mostly from Australia, where there was a 40% increase in production. “All this is set to change as October onward, large quantities are expected via imports from Australia and Russia. We also expect a bumper domestic chana crop by February-March 2017 as well on the back of good monsoon,” said Dongre. The industry is hoping for record cultivation of chana this year. Ankita Parekh, research analyst at Edelweiss Agri Value Chain said some supply constraint is expected to ease from August as imports come in.

“The government’s initiative to keep a check on hoarders and ensure supplies through imports will help ease the situation,” she said.
“The government’s initiative to keep a check on hoarders and ensure supplies through imports will help ease the situation,” she said.

Consumers and restaurant chains are shifting to cheaper substitutes such as lentils (masur), yellow peas (matar) and even moong to cut cost, Parekh said.

A bumper crop in 2014 had led to a sharp fall in prices and farmers were forced to sell chana below the minimum support price, lower than production cost in most places, and there was no procurement by the government either. A large number of farmers therefore shifted to other crops in the next season.

This year, traders expect good planting in key chana producing states including Rajasthan, Madhya Pradesh, Maharashtra, Karnataka and Andhra Pradesh.