Vol 1 issue 3 pulse india jan feb 2015

1Pulse India

From the Chairman’s DeskDear friends,

The last few months have been quite eventful. Starting with the visit of the Saskatechewan Trade Delegation under the leadership Honor-able Premier Mr. Brad Wall, the Round Table Meet of IPGA with the delegation, the uncer-tainty of import duty waiver on Chickpeas to the Kharif Production and Rabi sowing and IPGA’s Annual Meet….we have had our hands rather full.

The Association, last year, decided to conduct a crop survey and mandated GGN Research with the responsibility. Since the Tuar harvest con-tinued till the end of January and the final pro-duction numbers were expected in the first week of February, we decided to hold back this issue so that these numbers could be shared with you. In this issue, we have included the final Kharif Report (Sowing and Production) as well as the Rabi (Post-Sowing) report. I am sure that this will be of immense help to you.

Premier Wall, at the Round Table Meet an-nounced that the Govt. Of Saskatechewan will contribute USD 100,000 to IPGA’s efforts to promote the consumption of Pulses during the International Year of Pulses 2016 (IYOP 2016). The Saskatechewan and IPGA delegations dis-cussed a range of topics to ensure smooth trade operations including the breakdown of rail net-works in Canada which affected the exports. The Hon’ble Premier assured the IPGA delega-tion that adequate measures had already been initiated to implement a long term solution for such problems.

IPGA’s Annual Meet held at Vashi was attended by over 125 Patrons from Mumbai as well as other parts of the country. Mr. Sudhir Tungar, Secretary – APMC and Mr. D P Guha, West Zone Head – FSSAI graced the occasion as spe-cial guests.

Last but not the least; IPGA is putting together an exhaustive national plan to celebrate the In-ternational Year of Pulses 2016 and will look forward to each and every one of you to contrib-ute to the Association’s efforts. Our team will be in touch with soon with the various options of participation and I do hope that you shall wholeheartedly extend your support to the As-sociation.

I do hope you shall enjoy reading this issue of PULSE INDIA and look forward to your com-ments and suggestions.

Thank you

Pravin DongreCHAIRMAN

3Pulse India

Contents

KHARIF CROP 2014 – 15 HARVEST REPORT .......................................................... 6

RABI CROP 2014 - 15 POST-SOWING REPORT ........................................................ 13

Strong Yellow Pea Demand Forecast Brian Clancy ................................... 22

The Principles for Responsible Agricultural InvestmentDr. Bharat Kulkarni ......................... 24

Major Challenge for Indian Kabuli Chickpeas IndustryNavneet Singh Chhabra ................... 28

Unleash Your Business Potential with Small-size Agri Commodity Futures

Pallavi Oak ...................................... 30Chana Futures: A Technical Analysis Perspective and a USD/INR Outlook’

Gnanasekar Thiagarajan ................. 33

Disclaimer: The views and opinions expressed opinions expressed in the articles published in PULSE INDIA are those of the respective Authors alone, and do not necessarily reflect the opinions or policies of India Pulses and Grains Association (IPGA) and its Office bearers. The Association is neither responsible for the accuracy of any of the information and data supplied by Authors nor responsible for any offense caused inadvertently through interpretation of grammar, punctuation or language. IPGA and its office bearers are not responsible for readers taking or refraining from taking actions on the basis of information provided by the Authors. The Association and its office bearers are not responsible for any loss suffered as a result of any action taken or refrained from being taken as a result of any information contained in the publication.

Edited and published by Pradeep Ghorpade for an on behalf of India Pulses and Grains Association having its registered office at B/1002, 10th floor, Sarvodaya CHS Ltd., Building No. 11, Khernagar, Bandra (East), Mumbai 400051. Printed for India Pulses and Grains Association by Apollo Printing Press, 259, SICOF LTD., 69 Satpur MIDC, Nashik- 422007.

6 7Pulse India Pulse India

KHARIF CROP 2014 –15 HARVEST REPORT

Tuar, Urad And Moong

TUAR

Summary

¾ Sowing Summary

• Thisyearthearrivalofmonsoonalrainswasdelayed.

• TotalareaunderTUARcropof Indiahasdeclinedby8%over lastyear.AsweatherstayedunfavourableforsowingtillMidJuly.

• Sowingwasdelayedasrainsbegintoimprovefrommid-Julyandsowingstarted.

• Allthestatesareshowinganetdeclineinplantedarea.

¾ Harvesting Summary

• WeatherbecomesdryinDecwhichprovidedfavourableenvironmentforcropmaturationandharvesting.

• Harvesting has started and is continuing as weather is dry and soil is firm for machineoperations.

¾ Sowing time: Started from 2nd Week July and was majorly completed by 3rd week Aug.

¾ Harvesting time: Started from 3rd week of Dec and may complete by 3rd week of Jan.

All India Summary

¾ Total area under TUAR crop in India forthe year 2014 has decreased by 8% ascomparedtopreviousyear.

¾ Early Guesstimate of average yield forthe year 2014 has decreased by 17%overlastyear.

¾ EarlyGuesstimateof totalproductionofTUAR crop for India for the year 2014has decreased by 24% as compared topreviousyear.


ALL INDIA STATEWISE TUAR AREA YIELD & PRODUCTION

STATE

STATEWISE AREA,PRODUCTION & YIELD OF TUAR

AREA:-000’HECTARE ,PRODUCTION:-000’TONNES, YIELD:-KG./HECTARE

AREA 2013

AREA 2014

Change in (%)

YIELD 2013

YIELD 2014

Change in (%)

PROD. 2013

PROD. 2014

Change in (%)

Maharashtra 1096 1037 -5% 828 566 -32% 907.49 586.94 -35%

Karnataka 818 703 -14% 850 640 -25% 695.30 449.92 -35%

M.P. 532 521 -2% 780 820 5% 414.96 427.01 3%

A.P. 435 376 -14% 780 635 -19% 339.30 238.76 -30%

U. P. 349 320 -8% 690 730 6% 240.81 233.72 -3%

Others 624 606 -3% 725 650 -10% 452.40 393.90 -13%

All India 3854 3563 -8% 791 654 -17% 3050.3 2330.25 -24%

URAD

Summary

¾ Sowing Summary


• TotalareaunderUradcropof Indiahasdeclinedby5%over lastyear.AsweatherstayedwarmanddrytillMidJuly.

• Rainscontinuetoimprovefrommid-JulyandsowingcontinuedtillfirstweekofAugust.

• All the states are showing a net decline in planted area only Madhya Pradesh andRajasthanisshowinganincrementoverlastyear.


• Monsoonalrainsbecomeextinct from3rdweekofSeptfromCentral&westernIndia.

• Weatherbecomeswarm&dry inOct&Novwhichprovidedfavourableenvironmentformaturation.

• Harvesting continues without any interruption inCentral&westernIndiaasweatherwaswarm&dry.

• RainscontinuedinSouthernIndiaduetowhichsomebriefinterruptionharvestingoccurredandalsoleadtosomequalitydeclineofUradcrop.

¾ Sowingtime:Startedfrom2ndWeekJulyandwasmajorlycompletedby3rdweekAug.

¾ Harvestingtime:StartedfromlateSeptandcontinuedtill1stweekofNovember.

All India Summary

¾ TotalareaunderUradcropinIndiafortheyear2014hasincreasedby5%ascomparedtopreviousyear.

¾ Averageyieldfortheyear2014hasincreasedby3%.

¾ EstimatedtotalproductionofUradcropforIndiafortheyear2014hasincreasedby8%ascomparedtopreviousyear.


ALL INDIA STATEWISE URAD AREA YIELD & PRODUCTION

State

STATEWISE AREA,PRODUCTION & YIELD OF UradAREA:-000’HECTARE ,PRODUCTION:-000’TONNES, YIELD:-KG./HECTARE

AREA 2013

AREA 2014

Change in (%)

YIELD 2013

YIELD 2014

Change in (%)

PROD. 2013

PROD. 2014

Change in (%)

Madhya Pradesh 640.00 862.00 35% 275 410 49% 176.00 353.42 101%

Uttar Pradesh 577.00 561.00 -3% 400 360 -10% 230.80 201.96 -12%

Maharash-tra 330.00 256.00 -22% 566 540 -5% 186.78 138.24 -26%

Rajasthan 157.00 179.00 14% 450 400 -11% 70.65 71.60 1%Karnataka 84.00 60.00 -29% 450 425 -6% 37.80 25.50 -33%

A.P. & Telangana 38.00 29.00 -24% 425 400 -6% 16.15 11.60 -28%

Others 561.00 553.00 -1% 408 403 -1% 228.80 222.90 -3%Total 2387.00 2500.00 5% 397 410 3% 946.98 1025.22 8%

MOONG

Summary

¾ Sowing Summary


• TotalAreaundermoongcropofIndiahasdeclinedby13%overlastyear,asWeatherstayedwarmanddrytillMidJuly.

• Rainscontinuetoimprovefrommid-Julybutdidnotprovideenoughbreaks,duetowhichsowingintentionsweredifficulttoachieve.

• AllthestatesareshowinganetdeclineinplantedareaexceptMadhyaPradesh,Whichisshowingabigjumpoverlastyear.


• Monsoonal rains completelywithdrew from3rdweek ofSeptfromCentral-WesternIndia.

• Weather became warm & dry in Oct & Nov whichprovidedfavourableenvironmentformaturation.

• Harvesting continued without any interruption inCentral-WesternIndiaasweatherwaswarm&dry.

• RainscontinuedinSouthernIndiaduetowhichsomebriefinterruptioninharvestingoccurredandalsoleadtosomequalitydeclineofUradcrop.

¾ Sowing time: Started from 2nd Week July and was majorly completed by 3rd week Aug.

¾ Harvesting time : Started from late Sept and continued till first week of November.

All India Moong Summary

¾ TotalareaunderMoongcropinIndiafortheyear2014hasdecreasedby13%ascomparedtopreviousyear.

¾ Averageyieldfortheyear2014hasdecreasedby13%.

¾ EstimatedtotalproductionofMoongcropforIndiafortheyear2014hasdecreasedby25%ascomparedtopreviousyear.


ALL INDIA STATEWISE MOONG AREA YIELD & PRODUCTION

State

STATEWISE AREA,PRODUCTION & YIELD OF MoongAREA: ‘000 HECTARE, PRODUCTION: ‘000 TONNES, YIELD: KG./HECTARE

AREA 2013

AREA 2014

Change in (%)

YIELD 2013

YIELD 2014

Change in (%)

PROD. 2013

PROD. 2014

Change in (%)

Rajasthan 926 850 -8% 525 425 -19% 486.15 361.25 -26%Maharashtra 448 319 -29% 600 550 -8% 268.80 175.45 -35%

Karnataka 298 244 -18% 550 475 -14% 163.90 115.90 -29%M.P. 112 163 46% 300 435 45% 33.60 70.91 111%

A.P. & Telan-gana 141 90 -36% 500 450 -10% 70.50 40.50 -43%

Uttar Pradesh 75 64 -15% 450 400 -11% 33.75 25.60 -24%Others 400 355 -11% 415 367 -12% 166.13 130.13 -22%Total 2400 2085 -13% 510 441 -13% 1222.83 919.73 -25%

RABI CROP 2014 –15 POST SOWING REPORT

Chana, Masoor and Yellow Peas


CHANA ¾ Observation:

• ThegeneralwarmweatherturnedcoolerwithsomelightdrizzlesfrommidDecwhichwasbeneficialforChanacrop.

• FromMidDectoEndJanweatherhasbeencoldwith lightdrizzlesall throughoutwhichhasbeenaboontocropandcrophasrespondedwell

• Coldweatherisprevailingbuttillnowtheweatherwasnotbitterlycoldtohurtcropandnomajorlossesisvisible.

• Mostofthecropisinkeyproddingandfillingstage.

All India Chana Summary:

• Chanaareahasoveralldeclinedinallstatesduetoinadequatewater supply, lower prices and shift to cotton in south andMaharashtraespeciallyinKharif.

• ThedepartureofmonsoonwasearlierthanusualandsoduetobelowaveragerainfalltherewaspoorplantingconditionsinOct/Novmonthassoilmoisturewasnotadequateresultinginincreaseinvacantlandarea.

• Though on South there were rains in mid Nov which supported plantings but still theplantingintentionscouldnotbeachievedastherainswereconsideredlittlelate.

• WhereasinMPandMaharashtraweatherwaswarmanddryinfullNovmonthduetowhichtheplantingconditionswerenotproper.

State wise Area covered under Chana with comparison to last year:

STATECHANA AREA IN 000 HAC

GOVTAREA 2014 % CHANGE AREA 2015Madhya Pradesh 3360 -13% 2925 2885

Rajasthan 1675 -15% 1420 1497Maharashtra 1650 -15% 1400 1046

Karnataka 980 -5% 930 940Andhra Pradesh 580 -19% 470 402

Others 1392 -12% 1220 1331All India 9637 -13% 8365 8101

State wise Area covered under Chana with comparison to last year:

STATE AREAYIELD CROP

AREA SHARE(In Reference to last year)

M.P. 13% Lower Same or better Same or Lower 35%

RAJ 15% Lower Same or better Same or Lower 17%

MAH 15% Lower Same or better Same or Lower 16%

KAR 5% Lower Same or better Same or Lower 11%

A.P. 19% Lower Same or better Same or Lower 6%

All India 13% Lower Same or better Down


MASOOR ¾ Observation:

• ThegeneralwarmweatherturnedcoolerwithsomelightdrizzlesfrommidDecwhichwasbeneficialforMasoorcrop.

• FromMid-DectoEnd-Janweatherhasbeencoldwith lightdrizzlesall throughoutwhichhasbeenaboontocropandcrophasrespondedwell.

• Coldweatherisprevailingbuttillnowtheweatherwasnotbitterlycoldtohurtcropandnomajorlossesisvisible.

• Mostofthecropisinkeyfloweringandproddingstage.

All India Masoor Summary:

• Masoorareahasoveralldeclinedduetoinadequatewatersupply,poorreturnstofarmersandshifttoWheatcrop.

• ThedepartureofmonsoonwasearlierthanusualandsoduetobelowaveragerainfalltherewaspoorplantingconditionsinOct/Novmonthassoilmoisturewasnotadequateresultinginincreaseinvacantlandarea.

• Last year therewere higher crop losses due to cold & foggyweather conditions due towhich the returns were very unsatisfactory for farmers. This season, farmers sowingintentionswasalsolow.

• TherewererainsinLateDec&EarlyJanuarywhichwasbeneficialfortheMasoorcrop.

State wise Area covered under Masoor with comparison to last year:

STATEMASOOR AREA IN 000 HAC

GOVTAREA 2013-14 Change in (%) AREA 2014-15

M.P. 546.00 -7% 510.10 513.00

U.P. 612.00 -5% 581.27 609.00

Others 342.00 -2% 335.00 357.00

All India 1500.00 -5% 1426.37 1479.00

State Wise Masoor Crop v/s Last Year:

STATES AREAYIELD CROP

AREA SHARE

(In Reference to last year)

M.P. 7% Down Same or better Same or Better 35%

U.P. 5% Down Same or better Same or Better 41%

All India 5% Down Same or better Same or Better

20 Pulse India

YELLOW PEAS

All India Yellow Peas Summary:

• All India yellowpeas area has increasedover last year.Due to inadequatewater supply,farmerspreferredyellowpeaswhichrequirelowerirrigation.

• The increase in area is mainly in U.P. as there is a shift fromwheat due to lower wateravailabilityforirrigation.

• ThereisadeclineinAreaofM.Pduetopoorsowingintentionoffarmersaslastyeartherewerelossesduetocold&foggyweather.

• AlltherainthatfellinDecember/Januarymonthwasbeneficialforyellowpeas.

State wise Area covered under Yellow Peas with comparison to last year:

STATEYellow Peas AREA IN 000 HAC

GOVTAREA 2013-14

Change in (%)

AREA 2014-15

Madhya Pradesh 296.00 -4% 284.45 278.00

Uttar Pradesh 332.00 9% 360.90 394.00

Others 144.00 5% 151.00 160.00

All India 772.00 3% 796.35 832.00

State Wise Yellow Peas Crop v/s Last Year:

STATES AREA YIELD CROP AREA SHARE(In Reference to last year)

M.P. 4% Down Same or Better Same or Better 33%

U.P. 9% Up Same or Better Better 47%

All India 3% Up Same or Better Better


Strong Yellow Pea Demand ForecastBrian Clancey

All eyesareonRabi seasonpulse cropsonthe Indian subcontinent. How much isgrownwillhaveanimpactonworldtradein2015aswellasthelevelofinterestshowninfieldpeas,desichickpeas,andredlentils.

As of the third week of December, India’sagriculture department reported thatfarmershadplantedlesspulsesthanatthattimelastyear.Moresignificantly,whilelandin gram or chickpeas was down, land inotherpulseswasup.

This has caused countries like Australia,which rely on India to consume their desichickpeacrop, tobecomemorehopefulofstrongdemandthroughnextyear’sharvest.Yellow pea exporters in Canada and theUnited States are likewise hopeful that asmallergramcropwillimprovedemandforthatclassofpea.

Officially, Australia harvested just 435,000metric tonsofchickpeas thisseason.Therewere littlemore than 2,000metric tons ofchickpeas left at the end of the 2013-14marketing campaign, which ended inOctober,whichmeansthecurrentmarketingcampaignstartedwiththe lowestavailablesupplyofchickpeassince2007.

Barringamajorupwardrevisioninestimatedproduction, exports need to fall far belowtheirrecentaverageof600,000metrictonsper season. In recent years, shipmentsrangedfromalowofalmost465,000metrictonsin2009-10toahighof853,121metric

tons during the 2012-13 marketingcampaign. On average, India has been themost important buyer of Australianchickpeas in recent years, accounting for36%ofallexports, followedbyBangladeshat27%andPakistanat18%.

SmallerdesichickpeapeacropsinAustraliaand reduced plantings on the Indiansubcontinent suggest there couldbemorecompetitionamongbuyersfortheavailablesupplies. This should benefit yellow peaproducersinCanadaandtheUnitedStates.But, half of all yellowpeas expected to beshipped during the 2014-15 marketingcampaignhadalreadymovedbytheendofOctober. Moreover, China has yet to fullycoveritsneedsforthefirsthalfof2015.

Canadadoesnotpublishofficialproductionfigures for yellow and green peas. But,unofficialgovernmentdatapegsyellowpeaoutput at 2.68 million metric tons, down20% from last year. By contrast, Canada’sgreen pea harvest is up a third at 708,200metrictons.

The available supply of yellow peas inCanada is down 600,000 metric tons fromlast season,whichmeans itwillbehard toexport more than 2.3 million metric tonsduring the entire 2014-15 marketing year.Significantly, shipments during the firstthreemonthsofthemarketingyeartotalled1.15millionmetrictonsorhalfofallyellowpeasexpectedtobesoldthisseason.

Sales to China have been rising as thecountry uses yellow peas in more foodproducts. This should continue in thecomingyearasnewpeafractionationplantscomeonstreamtomanufacturepeaisolatesfor the food industry.Canadianyellowpeashipments to China have jumped fromalmost 562,000 metric tons in 2011-12 toover880,000lastseason.However,openingseason shipments to China were down235,000metrictonsoverlastyear,reflectingthefactthatChinaboughtmorepeasthanneededduringthefirsthalfofthecalendaryear.Thosesurpluseshavebeenconsumedand importers have been looking to coverneeds for the first half of 2015. It is notunreasonabletothinkthatChinamayneedto buy 400,000 metric tons of peas forshipment between January and June.That

demandwillhelpmaintaincompetitionforavailable supplies of peas at levels whichhave the potential to result in higheraverageprices thanduring the first half ofthe current marketing year. This would beespeciallytrueifreducedRabiseasonpulseplantings translate into improved demandforproductafterJanuaryandFebruary.

Supply and demand fundamentals seemmorefavorable foryellowthangreenpeas.But, except for bleached and off-gradeproduct, it is hard to see how green peascould become cheaper than yellow. Thatshould help yellow peas remain pricecompetitive against other pulses even inthefaceofprospectiveincreasesindemandfromChinaandtheIndiansubcontinent.


The Principles for Responsible Agricultural Investment (PRAI) - A new policy initiative.

Dr. Bharat Kulkarni

With the global food crisis of 2008, thecountries realized the potential ofinvestmentinagricultureandthisprovideda big thrust to international investment inCommercialagriculture.Ononehandweretheinvestors,wholookedatthepotentialofbusiness, and on the other hand werecountries that were looking up to thisinvestmentasourcetobridgethewidegapin investment. Various studies haveindicated that investing in agriculture andfood systems is one of the most effectiveways of reducing hunger and poverty.Unfortunately, it’s an irony that countriesthat have food insecurity and poverty arethe regions where agricultural investmenthasbeenstagnantordeclining.Asignificantincrease in investment in agriculture andfoodsystemsisrequiredtoaddressthefoodsecurityandnutrition. Investmentmaynotsolve food and nutrition insecurity andpoverty problems on their own, but it cansurelycontributetothecreationofstrongerandmoreresilientcommunities,whichcanbenefitfromotherinterventions.

TheUnitedNationsandotherdevelopmentalpartners believe that such investmentresults in multiplier effects forcomplementarysectors,suchastheserviceormanufacturing industries; and results inoverall economic development. With thisprinciple in mind, the investment in

agriculturefarminghassurged,especiallyinAfrica. With 60% of world’s arable land inAfrica and more than 75% of populationdependentof smallholderagriculture, thishas the potential of significantly affectingtheeconomy,bothpositivelyandnegatively.If thegovernance isweak,ortherightsarenot well defined, or those affected lackvoice,theinvestmentmayresultinarisk.

Not all are buying the idea of Farmlandinvestments. Some believe this is a landgrab that is moving fast. They allege thatcontracts are getting signed, land is beingaggressivelyfencedoffandlocalpeoplearegetting kicked off their territories. It isalleged that significant levels of land havechangedhands from farmers tocorporatesand is continuing. This is used by severalcountries, like Qatar, Saudi Arabia, SouthKorea or China, who have developedsovereign farms through investment, as aFood security measure. Such investment,many believe, are adding to themisery ofpoor farmers in these food insecurecountries.

Thisisapotentialflashpointinthemaking,unless sanctity is brought to theproceedings.Withthisinmind,themembersof the Committee onWorld Food Security(CFS), housed at the United Nations Foodand Agriculture Organization (FAO),

requested principles which wouldspecifically put food security andnutritionat the forefront of promoting additionalinvestmentinagricultureandfoodsystemstobe laiddown.The Inter-AgencyWorkingGroup (IAWG) composed of FAO, UNCTADsecretariat, International Fund forAgricultutral Development (IFAD) and theWorld Bank, since 2009-2010, has beenworking on developing the Principles forResponsible Agricultural Investment thatRespect Rights, Livelihoods and Resources(PRAI). The PRAI draw attention to rightsandlivelihoodsofruralpopulationsandtheneed for socially and environmentallysustainable agricultural investments.Theseprinciples should be referred to by thegovernments while developing laws andpoliciesonagriculturalinvestments.

Further, thiswas patronized by the G20 atitsSeoulSummitinNovember2010,aspartofitsmulti-yearactionplanondevelopment.It encouraged:“all countries and companies to uphold the Principles for Responsible Agricultural Investment. We request UNCTAD, the World Bank, IFAD, FAO and other appropriate international organizations to develop options for promoting responsible investment in agriculture.”

Variousaspectshavebeen looked into liketheoutcomeofFDIinagriculture,impactofvarious international commitments,Voluntary Guidelines on the ResponsibleGovernanceofTenureofLand,FisheriesandForests in the Context of National FoodSecurity, the Equator Principles, the OECDGuidelinesforMultinationalEnterprisesand

the Voluntary Guidelines on the Right toFood.ThePRAIisasetofsevenprinciples.

The Principles are:

Principle1:Existingrightstolandandassociatednaturalresourcesarerecognizedandrespected.

Principle2:Investmentsdonotjeopardizefoodsecuritybutratherstrengthenit.

Principle3:Processesrelatingtoinvestmentinagriculturearetransparent,monitored,andensureaccountabilitybyallstakeholders,withinaproperbusiness,legal,andregulatoryenvironment.

Principle4:Allthosemateriallyaffectedareconsulted,andagreementsfromconsultationsarerecordedandenforced.

Principle5:Investorsensurethatprojectsrespecttheruleoflaw,reflectindustrybestpractice,areviableeconomically,andresultindurablesharedvalue.

Principle6:Investmentsgeneratedesirablesocialanddistributionalimpactsanddonotincreasevulnerability.


Principle7:Environmentalimpactsofaprojectarequantifiedandmeasurestakentoencouragesustainableresourceuse,whileminimizingtherisk/magnitudeofnegativeimpactsandmitigatingthem.

Almostalltypesofinvestmentinagriculture,including between principal investors andcontract farmers are covered in theseprinciples.Further,theprinciplescoverbothlarge and small holdings. These principlesare based on detailed research on thenature,extentandimpactsofprivatesectorinvestment and best practices in law andpolicy.Theyareintendedtodistilthelessonslearned and provide a framework fornational regulations, internationalinvestment agreements, global corporatesocial responsibility initiatives, andindividualinvestorcontracts.

Way forward- The Committee on WorldFood Security (CFS) is convening thenegotiationofthePrinciplesforResponsibleInvestmentinAgricultureandFoodSystems.This negotiation happened in 2014 on thefirst draft that went through a series ofconsultation between September 2013 –March 2014, on what should be added,changed,and improvedbasedon theZeroDraft. Once agreed upon, the principleswereapprovedbytheCFSinits41stsessionon15thOctober2014.Theseprinciplesarevoluntary and non-binding, and provide a

framework that all stakeholders can usewhen developing national policies,programmes, regulatory frameworks,corporatesocialresponsibilityprogrammes,individualagreementsandcontracts.Theseprinciples, for the first time represent thatgovernments,theprivatesector,civilsocietyorganizations, UN agencies, developmentbanks, foundations, research institutionsand academia have agreed on whatconstitutes responsible investment inagricultureandfoodsystemsthatcontributeto food security and nutrition.Though theultimateimpactisstillnotclear,itisbelievedthat this initiative will guide the countriesto keep the principle of food security andpoverty in forefront while developing aninvestmentpromotionpolicy.Also,thiswillbring in greater accountability on theinvestorsinthesector.


Major challenge for Indian Kabuli Chickpeas Industry

Navneet Singh Chhabra

Abstract

Kabuli Chickpeas (Cicer Arietinum), a veryversatile legume, because of their highprotein content and nutrition values is animportant ingredient in day to day globalcuisine.Indiaisoneofthelargestproducer&exporterofKabuliChickpeaswithaverageannual production of 450,000 – 550,000tons of which 200,000 to 250,000 tons areexported and the rest are consumeddomesticallyinIndia.

However, a lot of care has to be taken toprotect Kabuli Chickpeas from attacks ofpests like the Bean Beetle Callosobruchus Analis (fabricius) which cause quantity,viability and nutrition losses. KabuliChickpeas pods are rarely infested in thefield.Thebruchidsattacknearlyafter60-75daysofharvestingi.e.inthestorageperiod.The adult 2 – 3 mm long brown bruchidswith black spots on the elytra lay eggs onthe seedsurface.The larvaeof this speciesfeedandpupateexclusivelyontheseedoflegumes(Fabaceae).Onegenerationiscompletedin4-5weeksduration.Theroundexit hole and the white eggs on the podwall are clearly seen where the beetle ispupating. The seeds in case of severeinfestation become completely hollow,loosedensityandbecomeunmarketable.

Affect on Industry

Inthepast10yearsIndianKabuliChickpeasindustry is booming & set a benchmark inglobaldemandandsupply.KabuliChickpeais the only legume that is allowed to beexported from India and the Bean Beetlehasbeenposingan immensechallengefortheindustry.Iftheexportedcargoisinfestedbythebeanbeetle,ithastobesoldathugediscounts, both in the domestic as well astheinternationalmarket.Anestimated40%ofcropisinfestedeveryyearbyweevilsdueto storage & weather conditions, causinglossesofaroundUSD5million.

TheBeanBeetle is not easy to control andfumigation can only provide temporaryresistance.Whatmakesitevenmoredifficultis the fact that Kabuli Chickpea and thebeetle eggs are both in white colour andtherefore normal hand picking is not veryeffective either. Sortex machines, too, arenotveryuiseful.Onlygravityseparatorsareaffective to some extent but for highlyinfestedcargowhichhaslostdensity.

Marketing of infested cargo is morechallenging in exports than in domesticmarketsbecause the transit time to Indianmarkets ismuch smaller. Kabuli Chickpeasthatareexportedhavealongertransittime

andthereforegiveenoughtimefortheeggsto pupate. The Kabuli Chickpeas arenormally exported in polypropylene bagswhich are air resistant and does not allowfumigants to reach the material packedinside resulting in growth of beetles intransit. This Bean Beetle issue is a primaryreasonforimportersbeingreluctanttobuyIndianproducefromthemonthofJuneandprefertoimportformotherorigins.

Control/ Treatment

While the beetle is difficult to control, thedamage caused by it can beminimized tosome extent by adapting the followingmeasures:

• Storageofcargoincool&dryplace

• Fumigationstobedoneonmonthlybasiswith Methyl Bromide by 32 Gram perCubic Meter, Aluminum Phosphide 18GramPerMT.

• StorageofcargoinJuteBags

• Hand picking , use of gravity separatortimetotimeduringstorage

As an integral part of the trade, it is ourresponsibility to educate farmers, traders,exportersandimportersoftheperilsoftheBean Beetle and the best possible waycontrol the damage caused by it. We alsoneedtoadviseimporterstoensurethattheKabuli Chickpeas they buy are packed injutebagsandnotpolypropylenebags.Jutebags allow for proper air circulation andfumigationisalsofarmoreeffective.


Unleash Your Business Potential with Small-size Agri Commodity Futures

Pallavi Oak

Theessenceoftheexistenceofcommodityderivatives markets cannot be betterrealised under any other circumstancesthan those prevailing at present. This isespecially relevant for agriculturalcommodities, prices of which areundergoingrapidadjustments, inthewakeofincreasedliberalization,urbanizationandchanging regulatory as well as climaticconditions. The consequent increase inprice volatility, given strong forward andbackward linkages of agriculture sectorwith others, has forced farmers, agro-enterprises, traders, exporters in India toadopt effective and sustainable strategiesand approaches to mitigate these pricerisks.

Commodity derivatives markets, servingtheir dual functions of pricediscovery andriskmanagement,haveemergedasalifelinefor themarket participants while enablingthem protect their enterprise value andcompetitiveadvantageintheever-changingbusinessenvironment.

However, compared to its potential, thegrowth of commodity futures market inIndiahasremainedalaggard.Manyfactorshave been responsible for lower rate ofparticipation; misconceptions, fear ofincurringwindfall losses, and standardizedtermsandrulesof tradingbeingthemajor

amongothers.Standard lotsizeofa futurecontract, for example, many a times doesnot match with commodity stakeholders’requirements and restricts many of themfromparticipatinginthefuturesmarket.

Small-size contracts, typically having a lotsize of one tonne (1MT) or two tonnes (2MT)asagainstthestandardcontracthavinglot size of 10 tonnes (10 MT), are set toovercome these limitations and open up anumber of opportunities for both small orlarge, novice or experienced, traders intermsofriskcontrol,flexibilitytotradeandeffecientutilisationofresources.

The biggest advantages the small-sizecontractsbringinisaffordability.Asagainstthe general perception that trading incommodityderivativeshasbeenavirtueofbig-pocket traders, small-size commoditycontracts enable those who can afford toputinafewhundredtoacoupleofthousandrupeestoparticipateincommodityfuturesmarket and reap the benefits of trading incommodity derivatives in a cost effectivemanner.

For instance, one can trade in small-sizecontract of chana available on the NCDEXplatform, i.e., chana 2MTworth Rs 66,500per lot, by paying just Rs 3,325 per lottowardsthemarginrequirementinsteadof

paying Rs 16,625 for trading in standard-size contract (of 10MT)worth Rs 3,32,500perlot.Thus,onegetstheexposuretopan-Indiachanamarketbypayingonlyone-fifthof themarginmoney thatonewouldhavepaid while trading in standard-size chanacontract!

This means not only is the entry costreduced,butlesscapitalislockeddownintoone particular contract, eventually,minimisingriskexposureandpotentialloss.Hence, one can participate in the futuresmarket without being afraid of gettingcompletelywipedoutbyasingletradethatgoes against him. Moreover, even if onedoes not have years-long experience intrading or investing in commodity futures,he can get started in futures trading withsmall-sizecontractinafarmoreeconomicalfashion and with lower risk environment.Onecanmanagetostay in thecommodityfutures market, while he learns and gainsexperience and develops sound,fundamentaltradingpracticesonhisown.

For the new entrants, small-size contractsactastheirgatepasstoderivativesmarket,while for theexperiencedandprofessionaltraders, theyact as additional tool for risk-mitigation.

A small trader, for instance, on an averagereceivestwo-fivetonneschanafromalocalfarmereverydayduringtheharvestseason.Generally, he does not sell such smallquantitiesimmediatelyandkeepsonpilingtheminhisgodownsuntiltheaccumulatedquantumisnotworthofatruckload.During

thisperiod,hefacestheriskoffall invalueofhischana inventoriesduetovolatility inchanapricesandhenceneedstohedgehisinventoriestominimizethelosses.

If the trader, for instance, accumulates 86tonnes of chana, with a standardisedcontract size in chana futures (10 MT), hecanhedgeonly80tonnes,whichleavestherisk exposure for six tonnes of chanauncovered. Small-size chanacontractwithlot size of 2MT, however, helps him hedgesix tonnes of chana on the exchange bytradinginthreeshortpositions.

Some traders that intend to take deliveryeventually,butdon’thaveenoughcapitaltofulfilmargin requirement immediately, canuse small-sizecontracts tobuildapositionthat they later can roll into a full-sizecontracttotakedelivery.

Small-size chana contracts on NCDEX arealignedtofull-sizecontractssuchthattheyexpire on the first day of the staggereddeliveryperiodforthefull-sizecontract,i.e.,onthe11thdayoftheexpirymonthofthe


full-sizecontractandaresettledattheDSPofthefull-size(10MT)contract.Thiskindofsettlement arrangement eliminates thepossibility of 2MT chana futures pricedeviating away from 10 MT chana futuresprices due to rigging. Moreover, thissettlement arrangement is of specialsignificance as delivery in small-size chanacontracts takes place through intentionmatching,whichdoesnothaveprovisiontocorrect or curb the distortions that arisewhen the market gets squeezed on eitherside.

Nonetheless, intention matching mode ofdelivery for small-size chana futuresprovidestheflexibilityofexecutingdeliveryasandwhenthecounterpartiestothetradefeel theneedtodosoand inturn, reducesthreatofdeliveries.

At present, small-size agricultural futurescontractsareavailableinchana,castorseed,guarseedandguargumonNCDEXplatform.Among these, commodities like chana,castor seed and guar seed do not attractany transaction tax (CTT), alike in case offull-size contracts, one ends up saving ontransaction expenses including taxoverheadswhiletradinginsmall-sizechanafutures.

Small-size contracts have potential toattract liquidity. They offer flexibility andmoreriskcontrolwhenthemarketiserratic,astheyprovidemoreoptionswhileenteringorexitingpositions.Forexample,whenone

trades in multiple small-size contractssimultaneously, and prices move in hisfavour,hecanchoosetotakeprofitsononeortwosmall-sizecontracts,whilelettingtherestofhispositionsridethemove,unlikeincase of full-size contracts, where he needsto decide the appropriate time to exit hisentire position, thus, foregoing anopportunitytomaximisehisgains.

With small and standard size futurescontract in commodity having identicalqualityspecificationsavailableonasingle-trading platform, day-traders can cash inarbitrageopportunities.

Small-sizefutureshavepotentialtoenhancecommodityderivatives’appealasaportfoliodiversifier. Pick-up in the trading of small-sizecommoditycontractscanhelpaltertheperception of commodity futures fromgambling products to hedging instrumentandthis,inturn,canfacilitateincreasingthedepthofcommodityderivativesmarket.

Chana Futures: A Technical Analysis Perspective and a USD/INR Outlook’

T. Gnanasekar

As mentioned in the previous update,Technical analysis is the evaluation ofcommoditiesbymeansofstudyingstatisticsgenerated bymarket activity, such as pastprices and volume. Technical analysts donot attempt to measure a commodity’sintrinsic value but instead use charts toidentify patterns and trends that maysuggest what a commodity will do in thefuture.

In the world of financial market analysis,fundamental and technical analysis is oncompletelyoppositesidesofthespectrum.Demand, supply and weather are allimportant characteristics to fundamentalanalysts, whereas technical analysts couldnot care less about these numbers.Whichstrategyworksbest isalwaysdebated,andmany volumes of textbooks have beenwrittenonbothofthesemethods.

What Is Technical Analysis?

Technicalanalysisisamethodofevaluatingcommodities by analyzing the statisticsgenerated bymarket activity, such as past

prices and volume. Technical analysts donot attempt to measure a commodity’sintrinsic value, but instead use charts andother tools to identify patterns that cansuggestfutureactivity.

Justastherearemanyinvestmentstylesonthe fundamental side, there are alsomanydifferent types of technical traders. Somerelyonchartpatterns;othersusetechnicalindicators and oscillators, and most usesome combinationof the two. In any case,technicalanalysts'exclusiveuseofhistoricalprice and volume data is what separatesthemfromtheirfundamentalcounterparts.

The field of technical analysis is based onthreeassumptions:

1.Themarketdiscountseverything.

2.Pricemovesintrends.

3.Historytendstorepeatitself.

We will endeavour to forecast the mostprobable direction for prices based ontechnicalanalysisbothinChanafuturesandUSDINRSpotinthisupdate.


been released so far endorses optimismabouttheU.S.economy.

Recent U.S. data has remained strong,especially labour market indicators,suggesting that the unemployment rate iscoming closer to the Federal Reserve'scomfortzone.Thatwouldbelikelytobolsterviews that the U.S. Federal Reserve is oncourse to raise interest ratesnextyearduetoasteadilyrecoveringeconomy,boosting

thedollar.

Asforthelocalcurrency,itisstartingtolookovervaluedagainstabasketof36currenciesona trade-weightedbasis, suggesting thattherupeeshouldideallyweakeninordertomaintainexportcompetitiveness.However,giventhatIndiaisoneofthefeweconomiesgrowing at 5.5% to 6%, this will helpinvestors overlook some of the structuralissues.

Thetablebelowindicateshowmuchdepreciationhashappenedsofarinothercurrenciesandwherewestand.

Currency / Commodity

Rate as on 16th June 2014

Rate as on 23rd Dec. 2014

% change

Brent Crude 115.70 60.00 48.10%

Chinese Yuan 6.22 6.20 -0.32%

Thai Baht 32.35 32.95 -1.85%

Indonesian Rupiah 11,920.00 12,445.00 -4.40%

Indian Rupee 60.11 63.45 -5.55%

Singapore Dollar 1.25 1.32 -6.01%

South African Rand 10.74 11.56 -7.63%

Malaysian Ringgit 3.22 3.49 -8.39%

Korean Won 1,016.00 1,103.00 -8.56%

Brazilian real 2.22 2.66 -19.71%

Japanese yen 101.95 120.00 -17.70%

Russian Rouble 34.50 55.00 -59.42%

BENCHMARK NCDEX CHANA FUTRES PRICE OUTLOOK

OUTLOOK ON USDINR

Thedollarhasbeenonarollonexpectationsthat interest rates could be hiked sooner-than-expected.Addtothisisaweakereuro

zoneand theprospectsofa cut in interestratesthere,furtherfuellingtheappetiteforthedollar in 2015. Economicdata that has

In our earlier update, we anticipated prices to find strong resistance in the3245-3300 zone and subsequently retrace lower towards 3050-3,100 levels.Pricesmovedexactlyasperexpectation.

Anydeclinesto3,000-3050shouldholdsupportswell inthecomingsessions.Marketsareshowinginclinationtotestthenextresistanceat3,400levels.Thecurrent price move could develop into a stronger one and a push higher ntowards3,600levelsorevenhighertowardsanimportantpricetargetat3760.This happens tobe a confluencepoint. It is a fibonnaci retracementpoint, arisingtrendlineresistancepointfromwherepricescouldsubsequentlyretracelowertowards3,400levels.

RISK: This view could go wrong and we will be forced to change our view if prices close below 2975.

Conclusion: While 3150-200 holds any attempts to decline, we can expect prices to test initial resistances at 3,420 followed by 3,600 levels or even higher to 3,750 in the coming months.

36 Pulse India

Intheabovetable,wehavetakenthepriceofBrentcrudeasabenchmarkanditseffectonglobalcurrencies. ThepriceofBrenton16thofJunewasatopandfromthereithasseenasharpfallasweallknow.Currenciesthat have depreciated within 5%, are insome way been benefited by the fall incrude prices. The rest have been severelyaffectedbyfallingcrudeprices.

So, the key for future direction completelyhinges onwhere Crude is headed in 2015.Thefundamentalsincrudearenotthatbad

as being portrayed, and the fall is morepolitical in nature. The largest producerSaudi Arabia has managed to convinceOPECproducersnottocutoiloutputevenifpricesdeclinefurtherfromcurrentlows.

Therefore, while the situation in cruderemains weak, the depreciation couldcontinue,butinalimitedway,asIndiaalsobenefitsfromfallincrudeprices.Apotentialmoveto65.50-66looks likely intheDollar/Rupeepairinthecomingmonths.Supportsareat62.95followedby62.45now.

THE INDIAN RUPEE

Onlyanunexpected fallbelow62.20couldchangeourbullishexpectationsandsuchafallcouldtakeitlowertowards60.80levels.

Favouredviewexpectsfurtherdepreciationaheadtocatchupwithglobalcurrencies.

- Gnanasekar [email protected]

(The author is Director of Commtrendz Research and the views expressed in this column are his own and the author is not liable for any loss or damage, including without limitations, any profit or loss which may arise directly or indirectly from the use of above information.)

Vol 1 issue 3 pulse india jan feb 2015

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