Yellow pea futures relaunch in India/
8 questions with NCDEX CEO Arun Raste

Why is NCDEX launching yellow pea futures now?

We're seizing a new opportunity with yellow peas. India is the largest importer of pulses globally, and we're perennially in short supply. Our domestic production is just about 50% of our total consumption. The government has allowed duty-free imports of yellow peas until the end of the year, possibly extending to March 2025. This gives us a window to introduce these futures.

How will this contract be structured?

We plan to have two delivery centers. One will be in Kanpur, North India, near the domestic production center. The other will be near Kandla port, where imports arrive. This structure balances both domestic and imported supplies.

What are the main goals of reintroducing yellow pea futures?

Our ultimate goal is to stabilize prices. Futures provide farmers with price indications for their crops months in advance, helping them make informed sowing decisions. It also gives the government early signals about potential supply shortages, allowing them to plan imports if necessary.

How does this align with the government's goal of pulse self-sufficiency by 2027?

While self-sufficiency is an ambitious goal given our limited land resources, aspiring for it can lead to increased production. Even if we don't achieve 100% self-sufficiency, we might increase our domestic production significantly. The futures market can play a role in this by providing price signals to farmers.

What are the potential risks associated with yellow pea futures trading?

The main risks are related to the supply chain. Shipment delays from exporting countries like Canada and Russia could be a major risk, as it takes 45-60 days for shipments to reach India. Quality degradation during transport is another potential risk. However, we believe the benefits outweigh these risks.

How do you see this impacting the global yellow pea market?

The market finds its own equilibrium. While we're not explicitly signaling to international markets, our futures prices will provide valuable information to global producers and traders about the Indian market's needs and expectations.

How will the futures market behave in the context of the lack of Minimum Support Price (MSP) for yellow peas?

Currently, yellow pea prices have been declining, so there's no immediate need for price support. The market seems to be finding its balance without intervention. As NCDEX prepares to launch this new futures contract, it marks a significant step in India's pulse market development. The success of yellow pea futures could pave the way for the reintroduction of other pulse futures in the future.

Can you tell us about your career trajectory and how you came to your current role at NCDEX?

I've been in my current role as CEO of NCDEX for the last two and a half years. Prior to this, I was the executive director of a dairy development board, dealing with milk during the entire Corona virus period. Before that, I worked as a banker, primarily focusing on agriculture, rural development, and the microfinance industry. I also spent about six years heading a not-for-profit NGO called International Resources for Fair Trade. My career began in agriculture banking, so I've always had a strong connection to the agricultural sector.