Mumbai (Commodities Control) - Chickpea prices in Delhi have been indicating a rise in near term, while vice versa is true for spot pea (Mumbai). The spread analysis of the two pulses (shown below) indicates change in its price movements, hereon.
Since 2015, the spot market premium of Pea (Mumbai) vs. Chickpea (Delhi) has typically ranged between 0.90x – 1.20x (10.00% discount - 20.00% premium). However, the recent rally in Pea prices has pushed this ratio near the highest levels of about 40%.
Based on historical trends, this is unsustainable and there is a good probability for the spread to contract over the next several weeks, offering a good spread-trade opportunity.
Meanwhile, spot price charts of Delhi Chickpea and Mumbai Pea (shown below) are typically moving in sync. Thus it is expected that the recent divergence in price action will resolve over the next several weeks.
Comparative price charts show that chickpea is edging up trying to catch-up with the recent spike in prices of spot pea.
Spot pea prices shot up from Rs 4600 to Rs 6000 level in a short span, while chana prices which was near Rs 4000 levels can be seen inching towards Rs 4300.
This sums up the analysis that Pea (Mumbai) may underperform Chickpea (Delhi) (on a relative basis).
Having said so, it is advised to Sell Pea (Mumbai) & Buy Chickpea (Delhi).
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Neha Anand
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