Chana dal and tur future prices fall below minimum support price

Pune: The price of chana dal and tur are falling, raising concerns that they would trade below the minimum support price (MSP).

NCDEX chana futures for March delivery, at Rs 46/kg, have fallen below the MSP of Rs 51/kg.

Chana dal, which was selling at Rs 72/kg, is now selling at Rs 60/kg. The March futures are trading at Rs 4600/quintal as against MSP of Rs 5100/quintal.

According to trade estimates, Nafed has transferred 8 lakh tonnes of chana to buffer stock, while 3 to 4 lakh tonnes of chana is expected to be available for sale in the open market. Of the 4 lakh tonnes of import quota for tur, about 3.25 lakh tonnes is likely to come before December 31, which is the deadline.

In case of chana, it was the market intervention by the government through state agency Nafed, which has resulted in pulling the prices downwards. Nafed’s selling of chana at lower price and alteration of the base price has also affected trade sentiments.

Price of tur dal, which was ruling at Rs 120/kg ex-mill has now declined to a range of Rs 90/kg to Rs 100/kg. Harvesting of tur will increase after mid-December. Substantial import of tur has depressed prices.

Nitin Kalantry, pulses processor from Latur in Maharashtra said, “Supply chain participants of pulses business are staying from the trade due to market interventions of the government. Now that the prices are indicating fall towards sub-MSP level, there is a need to increase the import duty on masur back to 30%. Nafed should refrain from selling chana or other pulses below MSP.”

Government had first cut the duty on masur to 10% and then extended it till December 31. Now, the global pulses market is waiting for India’s decision about import duty on masur that will be effective from January.

Prices falling to below MSP levels before the harvest even begins is resulting in losses for traders, processors, farmers, importer and exporters. “Extending the Prime Minister Garib Kalyan Yojana for some more time can also help maintain prices by taking care of the supply side,” said Kalantry.