Chana To Remain Lower On Profit Booking (15-May-2012)
Chana futures remained very volatile as the initial uptrend was followed by profit booking as a bearish trend was noted for most Agri Commodities.
Fundamentals look strong from a medium term point of view but with rates having shot up a lot over last few weeks, traders do not rule out some temporary profit booking in the short term.
Prospects of rising imports resulting in higher import costs amidst rising Dollar vs Re however can keep medium term sentiments firm. International market rates too reportedly have firmed up.
Domestic demand continued to remain good. Better Indian Food-grain production and in other items could prevent prices from rising a lot though. But expected fall in Pulses production could support Chana prices in medium term.
As per 3rd Advanced Estimates. Pulses output is expected to fall to 17.02 mln tonnes vs 18.24 mln tonnes in 2010-11. Chana production is expected to fall by 6.8% to 7.40 mln tonnes as compared to 8.22 mln tonnes last year.
Lower acreage contributed for this fall as per reports (Chana acreage reportedly fell by 4% to 89.57 lakh ha vs 93.41 lakh ha same period last year. As per Rajasthan farm department's first advance estimates for Rabi crops, Chana output is estimated down 7.8% at 14.76 lakh tonnes in 2011-12 season vs 16 lakh tonnes in 2010-11.
Output in Maharashtra in 2011-12 is seen down 42% at 7.5 lakh tn, while Karnataka's 2011-12 output is seen at 4.98 lakh tn compared to 6 lakh tn last year. Reports of decline in Pulses production especially Tur from states like AP, Maharashtra and Karnataka due to reported lower rainfall activities there, could support Chana rates in medium term.