Chana Futures at a Record despite NCDEX Cutting Trader Leverage
Production expected to be two-fifths below last year’s, hence the jump
Mumbai: The active chana futures hit the upper circuit to close at a record high of .₹ 5,543 a quintal (100 kg) on Friday despite the arrival season having got under way. Brokers and traders attributed the jump to production expected to be two-fifths below last year’s 87 lakh tonnes.
Traders were also comforted by fears of a ban in chana futures getting allayed by a regulatory clarification. Rather, the regulator directed NCDEX, which offers chana futures, to raise the margin on buyers (longs) to 45% (25% in cash) from 20% effective April 22. So despite the special cash margin kicking in on Friday, chana hit a record high.
On an aggregate basis, open interest (OI) jumped to 39,210 tonnes from 38,200 tonnes a day earlier – evidence of a long build up. What’s important is that chana futures are signalling prices to jump in the months ahead – .₹ 5,635 in June and .₹ 5,710 in July, which warrants timely action by the government to import more for meeting the rising demand.
Incidentally, the futures price of chana was trading at a discount to the spot price of .₹ 5,589.4 polled by NCDEX, showing that arrivals were probably not up to expectations.