Mumbai, June 03 (Commoditiescontrol):For the week ended on June 03, 2023, the bullish price trend for imported Tur from Burma and Africa origin continued, undeterred by the central government's imposition of stock limits on June 02. Moreover, tur price volatility heightened this week, primarily driven by Chennai's month-end settlement of forward contracts.
The sustained increase in Tur prices over the recent weeks is attributable to a constrained foreign supply, resulting from a more significant import disparity and an escalated demand for Tur dal for trading. This surge is further accentuated by a substantial decrease of 18.72% in Tur production for the fiscal year 2022-23, according to the third advance estimate. A confirmation of procurement by the Tamil Nadu civil supply tender for 16,000 metric tons of Tur dal at Rs 124.100 per kilogram has also played a role. The anticipated delay of the monsoon's arrival in Kerala by 3-4 days, initially expected on June 4, is another contributing factor.
Meanwhile, millers have faced challenges in sourcing Tur for their crushing processes. Consequently, they have ceased mill operations, diverting their focus to Tur dal trading to capitalize on the short-term profits offered by the heightened price volatility.
In terms of forward deals, the price for Lemon Tur, ready for delivery in Chennai, was quoted at Rs 10,400. However, prices for July delivery were higher, reaching Rs 10,900. As a result, the CNF (cost and freight) Chennai price for Burma Lemon Tur recorded a $70 increase, reaching $1,290.
The Akola market witnessed a Rs 775 increase in the price of desi Tur over the week, reaching a peak of Rs 10,500 per 100 kg. This rise was attributed to the growing demand from local and outstation mills bolstered by a robust uptake of Tur dal. Similarly, Tur prices in Gulbarga's mandi trade rose by Rs 500, ranging between Rs 10,300 per 100 kg, depending on the quality.
Tur dal prices in the Akola markets also followed an upward trend, with the new crop Tur increasing by Rs 700 per quintal. A similar trend was observed in Gulbarga, where Tur dal prices rose by Rs 1,000 per 100 kg. Additionally, Katni experienced a rise of Rs 450 per 100 kg.
The surge in demand for Tur dal processed from Tur sourced from Burma and Sudan increased prices by Rs 900-1,000 per 100 kg. Conversely, Mozambique Tur dal prices rose by Rs 400-500 per 100 kg. Despite the price hike, Tur dal processed from African-origin Tur remains significantly more economical than its domestically processed equivalent.
The prices for Tur from Africa, particularly from Malawi and Mozambique's Gajiri-white variety, have seen a notable surge of Rs 800-900 per 100Kg. This increase is primarily a result of diminishing African Tur stocks and the nearly exhausted supply from Sudan, a country currently grappling with a civil war.
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According to estimates provided by some traders in Burma, the reported available stock of Tur is approximately 30,000 tonnes. Contrarily, other sources suggest the total Tur stock is closer to 80,000 tonnes. A significant proportion of this stock is held by those traders and stockists who are currently reluctant to sell at the existing price, as they foresee further price escalations due to a deficit in Indian production. However, the current high CNF prices for Chennai have created a substantial import dispairity, thereby discouraging further imports. Meanwhile, the Burmese kyat has maintained its stability against the US dollar, trading at 2,850 Kyat per dollar.
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As per technical chart - Burma Tur (CNF$) - Trending higher / Next Resistance at $1,334. Click here.
Trend:The current price surge is driven not by increased demand but by restricted supply. Market participants holding the stock are hesitant to sell, anticipating further price rises. A similar situation is observed among Burmese traders and stockists, who also refrain from selling their stock, expecting prices to rise even more. However, it is important to highlight that the domestic price of tur dal has increased by 60% compared to the same period last year, while other pulses like Moong, Masoor, and Chana have either remained stable or experienced a slight decline or upward trend. This price movement has resulted in a significant disparity between tur dal and other pulses, which could shift demand towards other pulses, thereby reducing the demand for tur dal.
Moreover, the supply from Africa is expected to begin in September, and coupled with the domestic stock of tur held by the government, farmers, millers, importers, and retailers should be sufficient to meet the domestic demand. Therefore, considering the risk-reward ratio and the extremely overbought condition of tur prices, it is advisable to sell tur and tur dal at every price increase.
(By Commoditiescontrol Bureau: 09820130172)
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