Chana Prices Fall Despite Free Imports, Weak Demand Fuel Drop

Mumbai, 08 May 2024 (Commoditiescontrol): In a surprising turn, chana prices fell significantly after a recent surge, defying expectations tied to the announcement of free imports. This decline stemmed from subdued demand at the higher price levels. Weakness first appeared in Delhi markets yesterday evening, impacting both MP and UP lines, and has since spread to other markets today. Sources within the local industry cited diminished interest from dal and besan manufacturers as a key factor behind the price correction.

Although prices experienced a downturn, the reduction was less pronounced compared to the preceding increase. Delhi markets saw a dip in prices for both the MP and UP lines, with retail demand for dal softening post a price hike. Additionally, millers favored conservative transactions, contributing to the overall decrease.

The processed counter witnessed a drop of Rs 25-75 per quintal due to lackluster demand, albeit major mandis maintained stability, excluding Merta and Kota. Meanwhile, certain mandis in Madhya Pradesh remained shuttered due to amavasya observances.

Industry experts, however, reassured stakeholders that the downside risk remains minimal. Despite the recent price fluctuations, the overall demand for chana remains robust, coupled with constrained supply. Furthermore, a notable decline in arrivals over the past week is anticipated to sustain positive market sentiment moving forward. Market reports indicate a slowdown in seller activity at prevailing prices.

To address supply concerns, the Indian government allowed duty-free Chana imports until October 31st. However, limited global availability and rising international prices due to India's import policy have dampened import enthusiasm. This is likely due to a cost disparity between domestic and international prices.

With the upcoming monsoon season and easing of money supply post-election nxt month, improved demand for Chana is anticipated, potentially leading to a price recovery.

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