NCDEX’s barley contract for April 20 delivery jumped by Rs 67 or 3.74 per cent to Rs 1,860 per 100 kilograms amid low volumes.
With Tuesday’s gain, the crop took its cumulative gain to 19 per cent since March 17, and 42 per cent since October 4 last year as part of a broader trend.
Barley trades will be very low volume on NCDEX, with the April contract having open interest of 220 metric tonnes.
Analysts say the commodity appears to be in an uptrend, with prices expected to increase further going forward.
“Fundamentally, there are supply concerns in the domestic market due to Covid-19 and good demand from the beer industry, which is also supporting the prices,” said Manoj Kumar Jain, Director-Head of Commodity Research, Prithvi Finmart.
Barley is grown in the rabi season, which means it is sowed in October-December and harvested in March-April.
India produces about 17-18 lakh tonnes of barley per year, with the maximum output coming from Rajasthan, Uttar Pradesh and Madhya Pradesh.
Barley is used as an ingredient in the production of beer, whiskey, distilled beverages, soup, bread and biscuits. It is also used as animal fodder.
How to trade barley
Jain sees almost 11 per cent upside in barley from the current levels.
Barley is forming a cup-and-handle pattern on the monthly chart, and the current rally could extend till Rs 1,990 per quintal level, he said.
Jain suggests a buy-on-dips strategy for trading in barley around the Rs 1,800-1,760 zone for a target of Rs 1,990-2,060 with a stop loss at Rs 1,620.
