National Commodity & Derivatives Exchange (NCDEX) got SEBI approval to launch futures on ‘Whole Raw Moong Dal’ (unprocessed) at the beginning of this month. Raw Whole Moong Dal Futures were launched on 8th of July 2019 and opened at INR 6000 per quintal. The futures prices touched 6400 per quintal mark due to late monsoon and news of decreased sowing area of moong dal in India. The pulses sowing area has decreased by more than 20% throughout India and as per reports by agricultural department, production of moong dal in India is set to decrease by more than 25%. The 20-day delay in monsoon hit the sowing of pulses in Maharashtra, Karnataka, Tamil Nadu, Andhra Pradesh, Madhya Pradesh and other pulses producing states. Farmers were forced to sow crops which were not dependent on monsoon like Maize, Pearl Millet and Oil Seeds. Moong Dal Futures are currently being traded at INR 6300 per quintal and we expect the prices to gain in the coming months, as we get closer to the harvest season.
India is the biggest producer and consumer of Moong Dal in the world with more than 70% global moong dal production. India still imports more than 1,50,000 Tonnes of Moong Dal to meet its domestic demand. In 2015, India faced a massive shortage of pulses that was a result of artificial hoarding by certain pulses trade group. Since then the Government has taken steps to stock with government agencies and regulate the supply throughout the Country. However, prices of pulses keep breaking the INR 100 rupees a kg barrier every now and then and a well-regulated market is necessary.
NCDEX provides a perfect platform for price transparency and regularisation given the high price volatility the pulses market have been experiencing in the past couple of years. Location centre for NCDEX moong dal futures is Merta City while Jodhpur, Sri Ganganagar and Nokha cities in Rajasthan are the additional delivery centres. Future contracts in Moong are the perfect hedging tool for traders to mitigate risk and decrease price volatility in the commodity. In short, we feel this decision is good for everyone associated with Moong Dal Industry to curb illicit changes in prices.