Chana was selling at an average price of around Rs 8,000 per quintal in August, but moved up to Rs 9,750 per quintal in SeptemberRBI Governor Urjit Patel might have targeted to keep retail inflation at around 5 per cent till March 2017, but as he himself has pointed out in his maiden policy review, there are many upside risks to this target.
One such risk, which Patel and his team will have to deal with will come from pulses, particularly chana (gram), whose prices have shown a steady rising trend in the last few weeks.
Though, overall, the entire pulses complex has cooled down big time – with prices of some like moong (green gram) even dropping below the Minimum Support Price (MSP), necessitating government intervention – but chana has stood out from the rest.
Infact, data sourced from the department of consumer affairs show that in the last one month chana prices in major wholesale markets of the country has moved up by RS 2,000-3,000 per quintal largely due to supply crunch.
The August retail inflation dropped to a five-month low of 5.05 per cent due to slower increase in food prices.
Traders said in some wholesale markets of the country, chana was selling at an average price of around Rs 8,000 per quintal in August, but in September it has moved up to Rs 9,750 per quintal, with all possibility of it moving further atleast December end or January.
In other words during the peak festival season chana prices are expected to be high.
Chana is one of the biggest pulses grown in India, comprising of more than 40 per cent of all pulses grown in India. Chana production in the 2015-16 rabi season, dropped to 7.17 million tonnes, the lowest since 2008-09.
Being a rabi crop, the new harvest is expected to hit the market somewhere around January only before which prices will continue to remain high.
Though, import price of chana is somewhat favourable at Rs 5,400- 6,500 per quintal, but there too is a catch as heavy rains in Australia has reportedly damaged 30 per cent of the standing crop.Australia is one of the largest exporters of chana to India.
“For three years chana was selling at below the MSP of Rs 2,950 per quintal in mandis, which coupled with back-to-back drought compelled farmers to shift to other crops in the last rabi season. The fallout of which is being felt now,” Pravin Dongre, Chairman of India Pulses and Grains Association said (IPGA) .
The retail and wholesale price of chana also show a sharp divergence, which means whatever impact on prices is happening in wholesale markets is not getting adequately transferred into the retail markets.
The average difference between the wholesale and retail rates of chana is around Rs 1,850 per quintal.
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