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Informist, Wednesday, Aug 7, 2024

 

By Afra Abubacker

 

NEW DELHI - Kabuli chana prices have surged on account of robust domestic demand ahead of the festival season. Lower arrivals amid stock holding are also supporting prices, traders said. The government may consider removing the 40% import duty on the Russian variety of kabuli chickpeas to check prices, they added.

Traders say that if imports are not free, kabuli chana prices will rise further due to festival demand. Also, new crop arrivals are at least a month away. Currently, in the Indore market, kabuli chana costs 13,800 rupees per 100 kg, up 3,100 rupees since Jul 11, according to IGrain India. 

 

On Jul 11, the government lifted stock limits on kabuli chana after imposing stock limits in June on tur and chana to prevent speculation and improve affordability in domestic markets. 

 

"If the Indian government cut duty on Russian origin, then prices will correct. The market will become soft," Navneet Singh Chhabra, international trader, Shree Sheela International, said. "The Russian chickpea's outer covering is very thin. It can be used by millers to cater to besan (chickpea flour) demand," Rahul Chauhan, director, IGrain India, said.

 

Kabuli chana prices rose due to seasonal demand since July, Chhabra said. With the reopening of schools and the intense summer season drawing to a close, demand for pulses picked up in the local market, he added. Typically, during summer, the consumption of pulses drops as they increase body heat. 

 

Firm export demand to Turkey, the United Arab Emirates, Algeria, and China is also supporting prices, said traders. However, Chhabra says India's price competitiveness is receding with the rise in prices. "India is now at a premium to most exporters, including Mexico," he said. Major exporters of Kabuli chickpeas are Russia, Canada, and Mexico.

 

Unlike India, these countries do not absorb most of their produce and have to depend on exports to offload surplus, he added. During Apr-May, India exported about 40,000 tn kabuli chana, down from 45,000 tn last year, but up from 23,000 tn in 2022-23, Chauhan said. 

 

DESI CHANA

Though desi chana and kabuli chana are of the same chickpea family, the latter is mostly consumed in north India, while the former is used across India. The clientele for kabuli chickpeas is also majorly export destinations and the besan flour industry. 

 

Desi chana prices have risen amid firm domestic demand ahead of the festival season during Jul-Oct, traders said. Price of desi chana in Delhi, coming from Rajasthan, has risen to 7,400 rupees per 100 kg from 5,575 rupees last year, Chauhan said.

 

"Desi chana has always been in short supply. Yellow peas imports controlled the price rise," Vivek Agarwal, managing director, Bharat Subcontinent Agri Foundation, said. To check chana prices, the government, in December, allowed duty-free imports of yellow peas without any port restrictions. Yellow peas are seen as a cheaper alternative to chana. 

 

Chana production in 2023-24 is estimated at 11.6 mln tn, down from 12.3 mln tn last year, according to the agriculture ministry's third advance estimates. Production was hit amid an increased number of heatwaves.

 

Pipeline stocks from Tanzania are also seen as tight as the African country will likely take time to get accustomed to the new auction system. "The country is not so developed, there are initial connectivity issues. Procurement by exporters through government auctions will be slow as the current new auction system is just introduced in the country," Chauhan said. Tanzanian chana will only be available from next month, Agarwal said.  End

 

Edited by Aditya Sakorkar

 

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