Chana, barley, wheat firm up on rising govt buys

New Delhi: Lower production and increased buying by the government and companies have led to prices of chana, barley and wheat firming up, analysts and traders have said.

Chana and barley prices have increased almost 8 per cent, while wheat has increased 4 per cent in the past two months. The trade is expecting a further rise of 7 per cent in chana and barley and a 10 per cent increase in wheat in the next one month.

“Wheat prices have been increasing owing to major buying by the Food Corporation of India (FCI), millers, companies and traders. Another reason is the announcement by FCI that it will auction wheat under the open market sale scheme at Rs 2,080 per quintal and that every quarter the prices will increase by Rs 55 per quintal,” said a trader in the Delhi market.

He added that with import duty on wheat at 40 per cent, prices were not likely to fall as imports is unviable.

Till May 20, FCI procured over 323 lakh tonnes of wheat for the ongoing 2019-20 marketing year at a minimum support price (MSP) of Rs 1,840 per quintal. In the Delhi wholesale market after grading and transportation, wheat was being quoted at Rs 1,980 per quintal, which is expected to further increase to Rs 2,135-2,200 per quintal, said traders.

Simultaneously, the price of barley used by the beer and animal feed industry is also firming up. “Demand is good and supplies are less. Few shipment of imported barley have arrived in the country, but demand is higher and hence we expect prices to touch Rs 2,000 per quintal by August-September,” said Pankaj Aggarwal of Pragati Global Corporation, Sri Ganganagar. Barley prices have risen to Rs 1,840 per quintal on expectations of huge demand from malt and food industries this summer season. Chana prices, too continue to trade higher with demand coming from the stockists. “The stocks are going down due to limited auctions from government agencies and increased buying. National Agricultural Cooperative Marketing Federation (NAFED) had announced procurement of 2.5 lakh tonne of chana at MSP of Rs 4,620 per quintal. Already, the state-run agencies have procured 1.21 lakh tonne chana, masur and mustard so far,” said Anuj Gupta, deputy VP, research, commodities, Angel Broking.

Gupta said they were expecting chana production to be 8 per cent less in 2018-19 than the previous year at 103.2 lakh tonne. “Chana futures will trade higher in coming days as stocks with physical trade is diminishing amid lower imports and high consumption,” he said.