Kabuli Chana Crop Likely Bumper; Downside Limited On Empty Pipeline

MUMBAI (Commoditiescontrol) - New Kabuli chana season 2017-18 (Feb-Jan) is heading and with prospects of better crop this season commoditiescontrol.com has conducted a survey among prominent players in the industry to assess the supply-demand and price outlook.

India is the top producer and exporter of the commodity in the world market, while other major producers are Mexico, Australia, Canada, Argentina, Russia and US.

India is likely to dominate in global export market since crop is likely to be available first i.e. from February with empty pipeline in consumption countries due to lower crop in 2015-16.

Argentina crop is likely to be available from March-April, whereas Russia from May with U.S and Mexico new Kabuli crop starts from September-October.

India 2016-18 Kabuli Production Likely Higher
Kabuli chana production in the country during 2017-18 marketing year (Feb-Mar) is likely to surge at around 5 lakh tonnes against 3.5 lakh tonnes a year ago, according to finding of survey. Madhya Pradesh is likely produce 3.5 followed by 0.50 and 1 lakh tonnes lakh tonnes in Maharashtra & Karnataka.

According to survey domestic consumption and exports of Kabuli chana during 2017-18 is expected to be much better than last year due to lower rates followed by empty pipeline. Indian Kabuli chana 42-44 count at the benchmark Indore market was last traded at Rs 11,000/100kg.

According to trade sources around 300 containers (24 metric tonne each) or approximately 7,200 metric tonnes of Kabuli chana has been contracted in forward March delivery shipment.

The main destinations for Indian Kabuli chana are Pakistan, Algeria, Sri Lanka, Turkey, Iraq & UAE.

Exports Likely Surge Ahead On Empty Pipeline & Ramzan In May
The main demand for kabuli chana is likely to emerge before Ramzan i.e. May month from Gulf countries as consumption usually remains at the higher level, which is likely to keep Kabuli chana supported since pipeline are almost dry in these nations.

Conclusion: Weakness in Kabuli chana can't be ruled out in the near term with good crop ahead. But since India will be sole supplier of the commodity in the international market and is likely to receive good demand from overseas particularly in April-May for Ramzan festival may push prices to season peak level. However once overseas demand met and supplies starts from Mexico in September-October and other major producing countries prices may face resistance.

TECHNICAL OUTLOOK - CHANA GRAM INDORE DOLLAR

Last Close (Mean Price- 20/1/2017)-12700: Resistance Of 13500 To Be Tested

Trend is up on monthly chart with resistance at higher level from current level of 12700 to 13500.

Wave b for Wave iv is in progress which can end at current level to 13500.

In the event of a rise and close above 13500 then expect the rise to extend towards 15870.

Support is at 11700. A fall and close below 11700 can resume Wave c of Wave iv which can slide it back down to 9700 or below. Wild breakout above 13500 is essential to extend the rise.

Conclusion
Expect resistance and profit booking pressure till 13500 is not crossed. The band of movement can be 13500 to 9700. Overall sideways correction phase may develop if 13500 is not crossed strongly.

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