Expensive Chana will add to Deepawali Budget; ASSOCHAM

New Delhi, Sep 14 (UNI) With the festival season approaching, Chana - essential for a variety of Indian food items like Dal, Besan and sweets is likely to remain expensive this year on high global demand and low production in countries like India, Pakistan, Turkey and Syria.

This is evident from the Technical Outlook measured by analysts in the Futures Market. The outlook, published in Assocham paper on Commodities Market points towards a surge in global demand amidst tight supply which would remain limited to India, Turkey and Syria.

It says that Canada is running short of stocks while output in Pakistan is down to 3,50,000 tonnes as compared to 9,00,000 tonnes in 2005 with its domestic consumption ruling at 7,50,000 tonnes.

''Global supply constraint is having a severe impact on the Indian market, as is evident in our paper. While we have no say in the international market, we can improve our supply management,''said ASSOCHAM President Anil K Agarwal.

According to the technical analysis, there are reports of a shift from desi to kabuli chickpeas in the country while stockists are making heavy purchases. The area under chickpeas cultivation increased by 530,000 hectares to 77.10 lakh hectares, as compared to 2005 Rabi season.

Besides surge in the global demand, weakening rupee and higher export anticipation is also contributing to firming of Chana prices in the Futures market.

Anticipating higher prices before Deepavali, stockists have been holding stocks, aggravating the tight supply and the price situation.

Besides Chana, the Sugar outlook also points towards firming of prices in the international market. The Assocham paper has listed out expanding export market, regulatory government policies like tariff rate quota and the worldwide deficit as the factors to watch for the sweeteners.

''A major cut in sugar production and exports is expected from the European Union on account of its compliance with a WTO ruling to cut export subsidies (to limit subsidies to the tune of 1.3 million tonne),'' the paper said.

According to paper, structural changes in the longer term like directing processing of cane for ethanol is likely to divert cane away from sugar production and would affect the sugar supplies.

For instance, Reliance is planning to set up cane crushing mills that would directly crush ethanol.

Strong demand for ethanol in the reign of higher crude oil prices is expected to divert more cane crushing in to ethanol rather than sugar production, reveals the Paper.

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