Traders and experts at a virtual Agriculture Roundtable on Pulses have voiced concerns over the impact of forward trading on the pulses trade, stating that it has left the sector “bleeding” with deals being struck that defy market balance and fundamentals. Hiten Kataria, a Partner of Mumbai-based Sunraj Group, highlighted that despite the risks involved in forward trading, some traders continue to engage in it, likening it to a “casino” where luck plays a significant role.
Deepak Pareek, an agriculture economist, emphasized that many traders are not playing by the rules and are engaging in speculative activities that lack logic. This sentiment was echoed by Himanshu Pandey from Valency International Pte Ltd, who noted the challenges faced in the pigeon peas market due to supply chain disruptions and defaults in delivery.
Sunil Patwari from Season Overseas raised concerns about the emergence of new pigeon pea origins in Africa, leading to market distortions. He highlighted the negative impact of forward trading on market fundamentals, citing instances where prices crumbled post-contract agreements, leaving traders in a vulnerable position.
Guru Ravivarma from RV Exports shared insights on Tanzania’s mandate to channel all agricultural produce through the Tanzania Mercantile Exchange (TMX), resulting in delays in shipments and increased costs for traders. The discussion also touched upon global pulses production and demand dynamics, with a focus on India’s production, imports, and consumption patterns.
The roundtable participants also discussed the impact of climate change on pulses production, shifts in farmer preferences, and regulatory changes affecting trade dynamics. Overall, the consensus was that forward trading practices need to be reevaluated to ensure a more stable and sustainable pulses market in the future.
