April 14, 2021
The founder of AgPulse Analytica shares his insights on pulse markets and where he sees the industry heading.
When life hands you dirt, plant seeds. These words from Zimbabwe-born, Canada-based philosopher, author and entrepreneur Matshona Dhliwayo took on a personal meaning for Gaurav Jain in June of 2020. It was then, with the world economy in the grip of a global pandemic, that he opened the doors to his own market intelligence firm, AgPulse Analytica.
After a 13-year career as a research analyst for a handful of agribusiness firms, he sensed that the time was right for his “long-awaited dream” to finally take shape.
“I had been on the buyer side of research,” he says. “And during that time, I found there was a dearth of quality research material focused on global supply and demand of agricultural goods. This was especially pronounced for pulses, because it is a fragmented and small market compared to corn, wheat and soybeans, for instance. And with pulses being introduced in various new diets and the emergence of plant-based meat, there was no better time to start a data-driven market intelligence firm than right then and there.”
Starting a business in the age of COVID-19 had its challenges. For one, Gaurav and his team were unable to travel and make new contacts. Over time, however, the pandemic changed the way everyone did business. Virtual meetings and webinars became the new way to network, and, from his office in Dubai’s Silver Tower, Gaurav was able to turn this particular disadvantage into an advantage.
“The pandemic actually helped us reach a wider audience as more and more organizations became increasingly comfortable interacting online,” he says.
As AgPulse Analytica nears its one-year anniversary, the company celebrates its growing base of customers subscribed to its various commodity newsletters. These weekly and monthly reports cover pulses, wheat, coarse grains and oilseeds. In terms of pulses, AgPulse Analytica provides its subscribers with global perspectives on the world’s major yellow pea, chickpea, pigeon pea and lentil markets. Additionally, the company offers customized research and analysis reports and data, as well as consulting services, all designed to help its customers make informed investment and risk management decisions.
“Our coverage is global in nature and our statistical predictive models project yields from Australia to India to Africa to North America,” says Gaurav. “To us, a comprehensive global balance sheet helps reveal hidden clues.”
With new waves of COVID-19 still shaking the global economy and freak accidents like that of the Ever Given disrupting world trade, the GPC reached out to Gaurav to learn more about him and his company, and to get his insights on pulse markets in these uncertain times.
Gaurav: I grew up in rich agricultural lands in the Doaab region of North India and am the fifth generation in the field of agricultural trading. I have seen firsthand how Indian agri-business works by visiting the APMC’s across states.
After earning my MBA, I started my career as part of the research team at Futures First. In that capacity, I provided market intelligence to more than 150 inhouse grain and oilseed traders. In 2014, I relocated to Dubai and took on the responsibility of setting up a research desk for Trigon Gulf FZCO. From there, I moved on to spearhead the research department at the Phoenix Group.
And finally, in the middle of last year, a long-awaited dream took shape in the form of AgPulse Analytica.
Gaurav: For 13 years, at the three organizations I worked with, I have been on the buyer’s side of research. During this time, I found there was a dearth of quality research material on global supply and demand. Moreover, production and trade data are still elusive for many parts of the world. Because of these gaps, there are no global numbers being published for the current marketing years.
And in the case of pulses, because it’s a small and fragmented market compared to corn, soybeans or wheat, for instance, the need for a global perspective is even more pronounced.
Further, with the introduction of pulses in various diets and now with the explosion in plant-based meat alternatives, the pulse industry is attracting significant investments. There is no better time than the present to start a data-driven, market intelligence firm.
At AgPulse Analytica, with our team’s vast experience and extensive travel to grain and oilseed origins, we are sure to add value to stakeholders by providing comprehensive and detailed market information.
Gaurav: Our most popular services are the commodity-specific weekly and monthly newsletters that focus on the running “story” in the market and the potential developments in the production, consumption and trade of the commodity. We publish four newsletters every week on wheat, corn, oilseeds and pulses, and once every four to five weeks we produce a more comprehensive monthly newsletter with deeper insights on the supply-demand situation.
In addition, we undertake bespoke corporate engagements to provide product-specific and/or geography-specific detailing as per a client’s requirements.
Gaurav: Of course. Starting with yellow peas, India is likely to remain out of the international trade for the year. However, increased demand from protein extractors, snack manufacturers and feed makers have outpaced supplies. We remain bullish on yellow pea prices in 2021, with increased demand from these sectors. There is also the possibility that the Chinese market will open its doors to Ukrainian and Russian peas in 2021, and this will usher in a new era for European pea markets.
On kabuli chickpeas, global production in 2021 is estimated to be lower than the five-year average. Additionally, COVID-19 has reduced demand from the HoReCa sector. Even so, this may not be enough to balance the global supply. We expect prices for large caliber kabuli chickpeas to increase on reduced supplies in India and Mexico. The balance sheet for small caliber chickpeas is more balanced, but an uptick in yellow pea prices or large caliber kabuli prices could lift prices for this product, too.
In the case of desi chickpeas, Australia recorded a bumper crop this season and the pace of its exports has been swift owing to Ramadan-related demand from Pakistan and Bangladesh. That demand has now been filled and we expect shipments to slowdown. The price, though, may hold with cash-rich Australian farmers reluctant to sell. India, meanwhile, will continue to buy small quantities from Myanmar and African origins.
Lastly, on lentils, the outlook is the least bullish out of all the pulses. Lentils have the most balanced global supply; however, if India lowers its duty, like it did last year, Canadian red lentil farmers will benefit.
Gaurav: For yellow peas, there are three: Chinese feed demand amid the resurgence of African Swine Fever; European production; and the possibility of Black Sea peas entering the Chinese market.
For kabuli chickpeas, it is important to be aware of the effect that COVID-related lockdowns and restrictions on gatherings can continue to have on demand. Other key factors include North American production and the rise of marginal exporters.
Turning to desi chickpeas, much will depend on the capacity of Australian farmers to hold onto their crops. And of course, any change in India’s trade policies will have an impact.
Similarly, the global lentil market depends largely on India’s import duty structure.
Gaurav: To a large extent, pulses are still transported in containers, and a lot of the container traffic goes through the Suez Canal. The recent blockage there aggravated the container shortages that the pulse industry has been contending with for almost a year now. The vessel has now been removed, but the ripple effects of this incident will be felt for months. We expect container freight rates will remain at elevated levels and more pulses will be moved in bulk vessels instead.
Gaurav: With the harvesting of the rabi crop, protest sites have become less crowded and media attention has fizzled out. Additionally, the government does not appear to feel any pressure to initiate talks.
We believe the intention and wording of the laws favor the modernization of India’s agricultural sector; however, the government’s track record in implementing such landmark reforms has been poor. In the case of pulses, current MSPs are higher than international prices and have failed to expand the area seeded to pulses in many states. Indian farmers need the assurance of MSPs in order to plant more pulses and these reforms may not aid in that regard in the short- to medium-term.
Gaurav: The trade in Myanmar is accustomed to military rule. There were minor disruptions initially, but we do not see any repercussions in terms of pulse production and trade with India.
Gaurav: The acceptance of pulses as a non-GMO, allergen free, vegan and high protein food is increasing, and this will completely alter the pulses space this decade. Pulses will go from being considered the poor man’s protein to occupying the shelves of high-end supermarkets in the form of pulse-derived products. More research is required. There has already been significant investment in this area and the results will be seen very soon.
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Disclaimer: The opinions or views expressed in this publication are those of the authors or quoted persons. They do not purport to reflect the opinions or views of the Global Pulse Confederation or its members.
