Week Ahead:Tur prices could experience a short-term correction, but the overall outlook remains bullish.

As anticipated and reported in the previous weekly update, prices of imported Tur of Burma and African origin have experienced a notable increase. The recent price hikes can be attributed to mills engaging in need-based buying, low ready stock levels among millers and traders, fewer domestic arrivals, reduced supply as sellers remain inactive, and disparities in import volumes.

The price of Tur Lemon for ready/May delivery in a forward deal at Chennai traded at Rs 8,300 per quintal and for June delivery at Rs 8,550. On the other hand, in CNF Chennai terms, Burma Lemon Tur is trading higher by $40 at $1060, which is leading to import disparity when compared with the Chennai spot price of Lemon Tur at Rs 8,300 per 100/kg.

During the week, the price of desi Tur at the Akola market increased by Rs 250 in Bilty trade, reaching Rs 8,875/100 kg at the end of the week. This was primarily due to a demand for raw Tur from local and outstation mills. As sellers were not interested in selling at the prevailing rates, millers had to increase their buying price to make purchases. In Gulbarga's mandi trade, Tur prices also rose by Rs 200, reaching between Rs 8,200-8,600/100 kg, depending on quality.

The prices of Tur dal at Katni and Gulbarga markets rose during the week, with domestically processed Tur dal made from the new crop Tur in both markets increasing by Rs 200/quintal. Meanwhile, in Akola, the price of Tur dal increased by Rs 300/100kg.

Similarly, there has been a Rs 100/100Kg increase in the prices of Tur dal processed from Burma, Sudan, and Mozambique origin Tur.

The recent increase in Tur Dal prices can be attributed to the surge in raw Tur prices rather than a spike in demand. A comparison of the prices of Tur and Tur dal for the weeks ending on 15th and 29th April reveals that the price increase for Desi Tur and Tur dal was roughly the same, ranging between Rs 100-200/quintal for raw Tur and Rs 100-250/quintal for Tur dal. However, the price of Tur dal made from imported Tur did not reflect the rise in raw Tur prices to the same extent. Burmese Tur, for instance, increased by Rs 200-250/quintal while Tur dal made from Burmese origin Tur only rose by Rs 100/quintal. Similarly, although the prices of raw Tur of African origin surged by Rs 200-250/quintal, the price of Tur dal made of African origin Tur increased only by Rs 100/quintal. In fact, Tur dal made from Sudan origin Tur saw a drop in price by Rs 100. Underperformance of Tur dal prices as compared to raw tur indicates weak demand for Tur dal.

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Prices of Sudan, Malawi and Mozambique (Gajiri-white variety) Tur, which are of African origin, have increased by Rs 150-250/100Kg.

This price rise resulted from the increased demand from mills and almost no supplies from African origins, except for Sudan. Unfortunately, Sudan's supply has been disrupted due to an ongoing military conflict in the region.



Based on reports from Burma traders, most of Tur's stock is in strong hands, and they are not interested in liquidating it at the current price as they anticipate a further rise in price due to a shortfall in Indian production. Meanwhile, the Burmese kyat remained steady against the US dollar at 2,850 Kyat/dollar.



As per technical chart - Mumbai Lemon Tur - Trending higher / Next resistance at Rs 8,250. Click here

As per technical chart - Burma Tur (CNF $) - Trending higher / Next resistance at Rs $1,100. Click here

Trend : There are indications that the price of Tur may undergo a decline or correction in the near future. This could be due to a slowdown in demand for Tur and Tur dal, which is influenced by various factors. One of these factors is the underperformance of Tur dal prices compared to raw Tur, resulting in lower crush parity. Reduced or negative crush margins can lead to a decrease in crushing activity, which dampens the demand for Tur.

Another factor contributing to the decline in demand for Tur is the possibility of demand for Tur dal shifting to other pulses due to higher prices. The Indian Pulses and Grains Association (IPGA) has reportedly requested that the government replace Tur dal in mid-day meals with other pulses. If this happens, there could be a substantial drop in Tur and Tur dal demand.

Additionally, there is fear about government intervention, causing most market participants to engage in need-based buying, leading to reduced demand for Tur and Tur dal.

Overall, these factors combined may result in a slowdown in demand for Tur and Tur dal, causing prices to experience a correction or decline in the near future. However, it should be noted that no significant decline is expected, and the undertone is still Bullish for Tur. This is because there is limited supply in domestic markets and no major supply from international markets is expected except for Myanmar, which can supply only about 1.5 to lakh tonnes.

The next significant supply could come from African origins in September. Nevertheless, the rally will be restricted if demand shifts from Tur to other pulses.

(By Commoditiescontrol Bureau: 09820130172)