NCDEX seeks Regulator nod to relaunch Chana, Tur, Urad futures

Agriculture-commodities bourse NCDEX today said it has sought regulator SEBI’s nod to relaunch futures trading in pulses, especially chana, tur and urad. Tur (pigeon peas) and urad (black gram) were banned in 2007, while chana (gram) was suspended last year after prices soared, leading to a rise in inflation. “Farmers are seriously asking for pulses futures as (wholesale) prices have crashed below the MSP in some parts. If they cannot get MSP, you need market support price. Farmers are really asking for the whole pulses basket,” NCDEX Managing Director and CEO Samir Shah told reporters.

The exchange has recently written to regulator SEBI to allow it to relaunch tur, urad and chana as well as yellow peas, he told reporters on the sidelines of an event here. The government is now “more open” towards pulses futures, given the current price levels due to the better crop. Shah said, “Initially, chana may be allowed. The other three will come over a period of time.”

The Agriculture Ministry is also in favour of allowing futures trade in some varieties of pulses like chana as the platform will help farmers get an indication of prices. The Ministry is working on various options to protect farmers as the country’s pulses production is estimated to hit a record 22 million tonnes this year and prices may come under pressure.

On options trading, Shah said that SEBI is yet to issue guidelines. “There are some legal issues. It (SEBI) will release after sorting them out.” Asked if the exchange is ready to launch options, he said that the regulator has said it will allow one commodity each under agricultural and non-agricultural.”In agricultural, most likely, we will be recommending Soybean. We are ready to launch options in soybean,” he said.

Highlighting key challenges in integrating farmers on the exchange platform, Shah said limited commodities for trading, inadequate delivery centres and the high cost of accessing the market are bottlenecks facing the farmers today.”One restriction is that we have only 25 commodities for futures trade, of which may be, 10 are active. They are not enough for farmers who are producing so many crops. We don’t have all crops on futures,” he said.The second challenge is inadequate delivery centres. “We have 350 warehouses but farmers are across length and breadth of the country. They are asking for more delivery centres.”The third is the high cost of accessing the market, Shah said and added, “Earlier, Farmers Producers Organisations (FPOs) were allowed to take membership on the exchange, now they are not. They have to open a client account and then approach a member. That makes it expensive.”

On the other hand, Shah said that there are challenges of logistics to reach out to millions of farmers. “We have limited resource and we need partners.”Shah said that 26,400 farmers participated on NCDEX till February this fiscal. It could reach 30,000 and may even go up to 1.5-2 lakh by end of next year.