ShareKhan Newsletter Blog

Chana sowing has begun and the acreage till date stands at around 62 lakh hectare, almost similar to around 61.34 lakh hectare last year.

In the last two months, the prices have rallied by around 10% at the major physical markets on news of lower sowing in Rajasthan due to deficient rainfall there. However, we feel lower chana sowing in Rajasthan will not impact the overall domestic crop size since the state contributes only 12-14% to the domestic chana acreage. The impact would be been further offset by recent rains in central India including Madhya Pradesh and northern Maharashtra that will improve soil moisture there.

We believe, chana sowing this year could remain steady or could be down by around 5% due to farmer shifting towards other cash crops. Productivity in Rajasthan could be hit due to low soil moisture on deficient rains.

On the other hand, Australia and Canada are to harvest a record crop this year. Add to this the fresh crop arrival in January and government?s restriction on stock holding, and we arrive at increased supply of chana and other pulses in the first quarter of next year, which will pull down the prices.

Very much in line, we expect April chana futures to slide by around 10% to 12% from their present levels.