Pulses Market in India Has To Face Issues

The pulses sector is facing challenges as forward trading disrupts market fundamentals. At a recent Agriculture Roundtable on Pulses, organized by the Global Grains and Pulses Council and Acuro AI, industry experts warned about the negative impact of speculative trading on the market.

Unstable Market Practices Lead to Losses

Forward trading, which involves contracts for future commodity delivery, has led to instability of the pulses market in India. Hiten Kataria, Partner at Mumbai-based Sunraj Group, criticized the market's "casino-like" behavior, with many traders suffering losses. Deepak Pareek, an agriculture economist, highlighted the lack of logical market practices. Noting that 2024 saw unprecedented defaults and financial strain on traders.

Impact on Pigeon Peas and Chickpeas Prices

The pigeon peas market faced volatility over the past 4-5 months, with supply chain issues, delivery delays, and price drops from USD 1,30 per kg last year to USD 0,70 per kg. Chickpeas were sold at USD 0,92 per kg for post-Diwali delivery, but prices later fell sharply, leaving traders struggling to recover losses.

Tanzania's New Rules Affect Trade

Tanzania's Mercantile Exchange (TMX) has mandated that all agricultural produce must be sold through its platform, charging a 3% fee on trade volumes. This policy has created challenges for traders, as exports can only proceed with complete records, delaying shipments.

Global Pulses Market: Supply and Demand Gap

Global pulses production is 92 million tonnes (mt) against a demand of 119 mt, creating a gap in nutritional security. India, a key market, produced 24 mt, imported 6.6 mt, and consumed 28 mt, short of the normative 38 mt demand. Imports from Myanmar and Brazil have led Indian farmers to switch from urad to maize cultivation.

Climate Change and Market Shifts

Canada anticipates a 0.8 mt drop in pulses production due to climate change, with stock transfers to India continuing to meet demand. Karnataka’s procurement bonus for pigeon peas may also attract farmers from neighboring states, influencing local market dynamics.

Need for Market Stability

Experts stressed the need for more transparent and stable trading practices in the pulses sector. With market volatility, regulatory changes, and climate impacts at play, the industry must focus on sustainable growth to support both domestic and international trade.