The past week was marked by some intermittent profit booking at higher levels for the agri sector. The main reason was improved monsoon, reports from the critical kharif crop growing areas of North-West India.
As mentioned in my posts over last 3 months, rains will be critical in determining the short to long term trend for most of the agri counters. Even as ‘overall’ Monsoon is stated to be normal, there is a huge abnormality in the Monsoon aspect when we take sector-wise rains.
As per latest reports from IMD, overall Monsoon is at +7 percent, which should be good for the crops. But then the huge disparity in rains get reported. It is a massive +11 percent in Central India, +26 percent in South India, while in North-West India, the deficiency still remains high at -15 percent.
loods and highly deficient rains are bad for the crops that are at growing stages.
Festive season demand is jacking up price for the commodity that is still at lower rates than MSP (minimum support price). The conditions of kharif pulses look a bit apprehensive even as sowing was reported high this year. The incessant rains in Maharashtra and MP leading to floods on many areas could well be damaging for the crops.
A rise in Tur and Urad prices would have a corresponding bullish impact on chana prices. With Government procurement likely to remain high till November as it procures chana for the 80 crore Indian population due to the pandemic, this may well be a major factor in supporting prices in the long term. With arrivals still time away and festive season demand picking up strongly, this may well keep trend firm for the commodity.
We expect prices to touch the Rs 5,000 per quintal mark for September contract for Chana within next 2 weeks, as it nears the psychological level of Rs 4,400 per quintal.