Weekly: Most Pulses Weaken Amid Thin Activity Due to LockDown/Cash Crunch

MUMBAI (Commodities control) – Major pulses such as Tur, Urad, Masoor, Moong, Chana and White Pea slipped for the week ended 2 May, 2020 due to dull mill buying.

Demand and sale counter in processed pulses reported thin activity amid liquidity crunch.

Meanwhile, ample stock of pulses was reported at retail/wholesale counters as supply chain has improved after government supports farmers in helping deliver their produce in local markets, encouraging dal millers to resume production and ensure smooth movement of all trucks and carrier vehicles.

Trade activity was thin because of cash crunch and just 25-30% of market participation at the moment. Sections of major traders/millers are yet to start operating and were sidelined due to fear of corona virus.

Government agencies are strictly monitoring the prices of essential commodities in major markets.

However, lesser stock availability of old crops with government agency/ private traders and slower procurement activities of Nafed will support pulses prices. Moreover, demand deterioration in poultry/meats products is likely to result in increased consumption of pulses. It is also to be noted that pulses import will become costlier due to rupee depreciation as against USD.

Due to nationwide lock down, arrival of vessels and clearance of cargo at ports is hampered.

Pulses price fluctuation will depends on monsoon. However, IMD forecasts normal rainfall this year.

Burma Lemon Tur:

Tur prices of both imported and domestic variety slipped due to limited participation by the millers at prevailing rates, as demand and sale counter in processed Tur reported thin activity.

Meanwhile, mandi arrivals picked up in major local markets, but are still below expectation.

NAFED has procured 4,56,377.78 MT Tur at MSP of Rs 5,800/100Kg, as On April 30, 2020.

The government has allowed import quota of 4 lakh tonnes of Tur in the fiscal year 2020-21 only for millers and refiners.

Moreover, the government will buy 200,000 tn Tur from Mozambique in 2020-21 (April-March) on a bilateral basis.

Trade is of the opinion that Tur prices are likely to get support due to low carryover stock and empty pipeline. The millers/traders have been trading hand-to-mouth due to liquidity crunch and Government policy.

Burma Urad:

Burma-Urad remained weak at Mumbai, Chennai, Delhi and Kolkata markets amid negligible buying activity from millers and traders due to slower offtake in processed Urad and expectation of overseas supplies within fortnight.

Moreover, summer crop arrivals of new Urad are expected to pick up pace in various states.

As per Burma-based trader, direct vessel is expected to arrive on 5th and 9th May, 2020. Another vessel is likely to load Urad for Chennai and expected to reach India before 15th May.

However, urad stock was reported to be limited, while overseas supply (from Burma to Chennai) continues to be slow paced.

Meanwhile, Supreme Court has pushed the date of hearing on pulses import restrictions till May 11, 2020.

DGFT extended the deadline for import of additional quota of 2.5 lakh tonnes Urad to May 15, 2020, against quota allocated for the year 2020-21. Earlier this date was 31st March which was extended to 30th April.

Chana Kantewala (Indore):

Chana prices slipped in domestic markets, amid cautious buying; just enough to meet their immediate requirements for crushing. Rise in arrivals and liquidity crunch add to the price pressure.

Even demand for chana dal and besan was lukewarm at wholesale/retail counters due to availability of sufficient stock.

Moreover NAFED's stock liquidation at selected states, holding major stock and higher output estimates will keep check on prices at upper level.

As on April 30th 2020, NAFED has successfully procured 2,50,272.7 MT of Chana at Minimum Support Price of Rs 4,875.

Imported Masoor (Mumbai):

Both imported and domestic variety Masoor declined as millers refrained from purchasing at higher rates. Ongoing arrival of new crop in Madhya Pradesh and Uttar Pradesh is keeping a lid on price gains. Although mandi arrivals are below expectation.

Meanwhile, demand in processed masoor from consumption centres was reported to be thin amid cash crunch.

As per market view, Masoor prices are likely to get support from limited stock of ready imported Masoor, higher import parity and below expectation arrivals of rabi masoor crop due to nationwide lock down and lesser acreage.

Imported White Pea (Mumbai):

Prices of White Pea remained weak at Kanpur market due to arrivals of new crop and thin mills’ buying. However, arrivals were below expectation as major producing centers were closed in Uttar Pradesh.

The reason behind this dullness lies in the shift of White pea trading volume, as the preference stays with Chana/Kabuli Chana due to cheaper prices and easy availability.

No quotes of imported White pea were available in Mumbai/Kolkata from last couple of weeks due to lockdown and due to less stock.

The peas could not find support, despite tightness in ready stock.

Moong (Jaipur):

Moong prices traded lower, as per quality, due to new summer crop arrivals and dull mills’ buying at higher rates due to crushing disparity at higher rates, as demand in processed Moong was reported to be weak. Sellers were active in the market to liquidate their holding stocks at higher rates. Arrivals’ pace of new summer crop is likely to pick up soon in various states, Gujarat, Madhya Pradesh, Uttar Pradesh, Bengal and Bihar.

Meanwhile, the government has allowed import quota of 1.5 lakh tonnes of Moong in the fiscal year 2020-21, only for millers and refiners.

As per market trend, Moong prices will be pressurised in the short term as consumption demand is likely to suffer at higher rates. However, eventually lower output, low stocks with government agency/private traders along with smaller moth crop should support the prices.