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Akola Tur Prices Set to Climb amid Declining Stocks, Upcoming Demand; Charts Point Towards Rs 10,500 Levels

27 Sep 2020 5:54 pm
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Mumbai Commodities Control - Tur prices at Akola are headed northwards. The pulses seed cruised past a key level of Rs 7000 per Qtl as of 24th September 2020. The consistent demand in dals and depleting stocks helped pull up the Tur prices in the last two weeks. Apart from the fundamentals, even technical charts indicate movement in favour of Tur going ahead.
India Tur acreage this year is estimated to be 48.49 lakh ha, 5.69% up from last year. The early sowing, timely rainfall has helped crop over July/August period, but heavy rainfall during the first three weeks in September may dampen the yield. Estimated production for 2020/21 is forecasted to be 4.4 M MT, while 2020/19 crop is estimated to be 3.83 M MT.
India imported about 0.54 M MT of tur in 2018/19, for 2019/20 the import is estimated to be down to 0.45 M MT primarily due to demand destruction from pandemic.
It is to be noted that in the current scenario, when prices are rising up sharply the govt is yet to allocate the import quota for Tur. The delay in allocation will directly impact the domestic availability. The allocation of quota may be given by 15th October, as per one of the importers. Till the imports are open, the local supply is likely to remain acute.
As markets are slowly opening up all over the country, the demand for the Q4’2020 is likely to be higher than prior quarters. Few factors have impacted demand as explained below.
The pandemic has brought unprecedented economic disruption in Indian economy and months of lockdown made livelihood difficult for a large section of society. Government has distributed grains, pulses and other essential food items, mostly for free to the poor and thus, increasing the consumption.
A bearish factor for the pigeon peas price does surface, though. In the pulses segment, Govt distributed Chana da which is likely to affect pigeon peas consumption. Government distribution of chana dal will also lead to lesser consumption of other pulses. Income loss among the populace will lead them to consume the cheapest sources of protein and with over 10 M MT of Chana production, Chana dal is likely to fit in.
Having said so, NAFED has procured about 5.4 lakh MT tur of the 2019/20 season. The carry over stock is estimated to be just about 1 lakh MT. The cumulative availability with NAFED is mere 6.4 lakh MT, of which NAFED will likely keep at least 3 lakh MT as buffer for next year.
Remaining 3.4 lakh MT is hardly a month’s consumption in India. We are at the fag-end of September, and Dussera, Diwali, wedding season is ahead of us. The Govt will likely open up imports to keep up with the demand. This will be a big plus for driving tur prices higher.
But, for the upcoming elections in states of Bihar and West Bengal in 2020, the central government will likely set parameters to not repeat the 2015 price spike. NAFED stocks will be released from time to time to the mills to ensure an uninterrupted flow of pulses in the region. Latest measure of reduction in lentils import duty to 10% from 30% is a step to keep prices of masoor (Lentils), direct replacement of Tur, in check.
This sums up for fundamentals in favour of spot tur prices and technical charts seem to be in agreement, as well.
Charts show that Tur Dal (Akola) has registered a bullish breakout from a Multi-year Range (Rs. 7,500 – Rs. 9,000). More upside lies ahead and technicals point towards the upside target close to Rs. 10,500.
Similarly, Tur Bilty (Akola) prices have an upward trajectory. From a chart perspective, we see the next target approaching near Rs. 8,500.



       
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