Dry Pea (Matar) Near Term Outlook Weak; But Recovery Likely At Lower Level

MUMBAI (Commoditiescontrol) - Canadian dry pea (matar) dropped nearly 38 percent at the benchmark Mumbai pulses market during the last four month due to continuous flow from overseas, prospects of record production in Canada & U.S followed by bumper kharif pulses sowing.

India has imported around 8.91 lakh tonnes of dry pea during the first four month of current marketing year 2016-17, begins from March, nearly 78 percent higher from 5.01 lakh tonnes same period in 2015-16.

The domestic dry pea consumption is somewhere around 26 lakh tonnes, while India produced 6.5-7 lakh tonnes in 2016-17 and in order to meet its domestic demand India imports a substantial amount of dry pea mainly from Canada, Russia, Ukraine and U.S.

Dry pea prices during the current marketing year 2016-17, which starts from March, surged 47 percent to touched peak level of Rs 3,525/100kg on June 30, 2016, however thereafter selling pressure on rising availability of dry pea from overseas followed by weakness in other pulses has led to sharp correction in prices.

Further dry pea of new Canada crop for October-November shipment was available at discounted rates, which has also weighed on market sentiments.

For 2016-17, dry pea production in Canada is estimated rise by 45 percent from 2015-16, to a record of nearly 47 lakh tonnes, due to a sharp rise in yields and a 15 percent increase in harvested area. U.S dry pea production is projected to rise sharply to a record 10 lakh tonnes. (Full Report)

Importers those who had sourced dry pea earlier in the range of Rs 2,650-2,700/100kg are now selling their stocks in losses at the current level of Rs 2,200 amid tight liquidity to clear their cargo, however big importers are reluctant to sell their stocks at lower.

According to Kanpur based traders, some importers prefer to bring their cargo by wreck in Uttar Pradesh and were maintaining their stock in godowns.

Consumption of dry pea likely to increase as it is very cheap compared to other pulses/vegetables.

Dry pea sowing in the country is likely to rise this season due to good moisture in key producing states of Uttar Pradesh and Madhya Pradesh amid better rainfall this season.

Dry pea prices are likely remain under pressure for next couple of months due to supply pressure. According to experts dry pea prices are likely to fell another Rs 200/100Kg from current level due to consistent supply from producing countries and selling by small traders and importers, but some recovery thereafter can't be ruled out as big importers are unlikely to sell their stocks at the lower level due to huge losses, which may led to supply constraint and support dry pea prices.

Moreover dry pea stock from local crop is mostly negligible and hence domestic demand is now entirely dependent on supply from overseas.

Further processed dry pea (matar dal) is cheapest at Rs 2,700/100kg compared with processed chana dal (chana dal) at Rs 12,500-14,000 and with other processed pulses, which may led to higher consumption. Further dry pea besan is very much competitive at Rs 1,700/100kg against chana besan at Rs 6,750.

TECHNICAL OUTLOOK

Mumbai Dry Pea Canada White - Lower Range Can Provide Support




A sharp fall has been witnessed and expects the last bottom of 2131 to be tested. Resistance is at 2221-2351. Support was expected to provide bounce and recovery from lower range of 2131 or below.

Trend is down till reversal is not witnessed further down trend will continue with minor recovery.

Indicator like RSI and Stochastic are in oversold zone on weekly chart.

A sustained fall below 2131 can lead to further sustained fall and that may not happen as the next level for long term is significantly down beyond imagination therefore recovery may happen from lower level of 2130 or by some violation of 2130.

The 127% of the fall from last rise 2131 to 3525 during the period 2014 to 2016 is at 1761. The 161.8% of the fall from last rise 2131 to 3525 during the period 2014 to 2016 is at 1278.

Since these levels are drastically down recovery could happen from 2130 or by violating it for few points for some days considering the oversold zone as well.

Conclusion
Support is at 2171-2131 downside momentum may continue below 2131.

(By Commoditiescontrol Bureau; +91-22-40015533)