Trade Talk with Gurav Bangeja/
India Reopening

As several states in India lift lockdown restrictions, the demand for pulses, especially from the HoReCa sector, which lagged for more than a year, is expected to pick up in the coming months, says Gaurav Bangeja, director of Saibaba Agrilink Pvt Ltd,  an international commodity trading firm in India.

Gaurav expects pulse prices to remain firm for the coming festival season, which begins in September, as there could be tight supplies of some pulses, such as chickpeas. With stock limits in force, traders are expected to liquidate their stocks early and the next chickpea crop will not arrive until February 2022.

Gaurav thinks the yield for kharif pulse crops could be lower this year because of patchy rains. Based in Indore, Madhya Pradesh -- the center of India’s pulse production-- Saibaba Agrilink has a direct link with growers.  

In this interview with the GPC, Gaurav Bangeja, a second-generation entrepreneur who runs a four-decade-old family business, says that in addition to  the pandemic, the commodity trade is being hit hard by increased fuel prices and high ocean container freight rates. Due to a shortage of containers, pulses are being shipped as breakbulk cargo, risking product quality and safety.

GPC: As lockdown restrictions are being eased in India, do you expect a pickup in demand for pulses, particularly chickpeas, from the HoReCa (hotel, restaurant, catering) sector?

Gaurav Bangeja:  As lockdown restrictions are being eased across the country, I think the demand for kabuli chickpeas should pick up. Unlike other pulses, kabuli chickpea is not regularly consumed in households. It is considered a special dish that is served at weddings and festivals, with demand coming mainly from the HoReCa sector. As this sector is now re-opening, demand for kabuli chickpeas should go up. I also expect better demand for light speckled kidney beans, red kidney beans and browneye beans, which come in a higher price bracket. These are largely consumed in northern India. I expect demand for chickpeas and other pulses to increase during the coming festival season.  

GPC: The government has recently imposed stock limits on pulses, except for moong, as a measure to control prices.  Some traders fear that this could result in shortages. What do you think?

Gaurav Bangeja:  The government’s intent is to curb speculation and check price volatility. However, a large number of traders, importers and millers are unhappy because the sudden imposition of stock limits creates confusion, and they fear they may be penalized for no reason. It degrades confidence in the system and trust in the government. In the case of chickpeas, some stocks are in the hands of farmers, and these are not subject to the stock limits. Stocks held by millers may come within the stock limit. Traders holding excess stocks could be affected. This creates fear and confusion. The next crop will arrive in February/March 2022. If demand increases, traders will liquidate their stocks early due to the loss of confidence and stock limit restrictions. There is also demand from farmers at seeding. So supplies could be tight later this year.

GPC: Do you expect prices to fall now that free imports of certain pulses are being allowed? What is your market outlook for the coming festival season?

Gaurav Bangeja:  Given the current market situation, weather forecasts and government policies, I don’t expect prices to fall in the coming months. Rather, I expect to see prices increase for this festival season. Import restrictions have been lifted for tur, moong and urad, but I don’t expect large quantities to arrive and flood the market and push down prices.

GPC: India announced higher MSPs for pulses such as urad, tur and moong. Do you think this could lead to an increase in the seeded area for these pulses?

Gaurav Bangeja: The MSP is a guarantee to `Kissan’ (farmers) that the government will buy their production at a minimum price. This is expected to encourage farmers to grow more of certain crops. I am sure the higher MSP will lead to an increase in the area under pulses.

GPC: News reports indicate the sowing of pulses has slowed this kharif season due to the patchy progress of the monsoon. What are you seeing?

Gaurav Bangeja: The monsoon arrived late this year. The patchy rainfall has impacted seeding in some places. This might result in lower yields. On the other hand, the latest reports indicate good rains in some growing areas.

GPC:  In addition to the COVID-19 pandemic, the past few months have seen a surge in fuel prices, a spike in ocean container freight rates and the depreciation of the rupee against the dollar. How have these factors impacted the commodity trade?

Gaurav Bangeja: Several factors affected the commodity trade over the past few months. COVID-19 is the main one. The travel and tourism industries were hit badly. So was the hotel and catering sector. India is a land of festivals, but due to the pandemic there have hardly been any celebrations for more than a year now. No wedding parties, no social gatherings. All this affected pulse consumption. The situation worsened with the increase in fuel prices and the high ocean freight rates. We haven’t seen such increases in container charges in the recent past. The shipping of commodities has become a nightmare. Container shortages and delays at ports have pushed up costs by a factor of 4 to 5 over the course of a year. Importers are bringing pulses as breakbulk cargo, which is not as safe as in containers.

GPC: As a pulse exporter and importer from India, what are you hearing from overseas buyers about India’s exim policy on pulses?

Gaurav Bangeja: Overseas traders have not been very happy about India imposing import restrictions and high duties on certain pulses. Of course, the government recently lifted the import restrictions on some pulses, which was welcomed by international traders. Traders like to have a long-term policy that gives them time to make business decisions.  

As far as exports are concerned, Indian agri commodities are expensive in the international market compared to that of our competitors. This year, exports became more costly because of higher ocean freight rates. Nevertheless, India, being the largest producer and consumer of pulses, continues to be active in the pulse trade. Pulse consumption is expected to increase globally, as more and more people are becoming vegetarians. In India, too, we may have to depend on imports to meet our growing demand, despite increased production.    

GPC:  What has Saibaba Agrilink’s journey been like over the past two decades?

Gaurav Bangeja: Our family has been in the business for four decades. The parent company, Satyam Traders, was established in 1986. Saibaba Agrilink was set up in 2006. We have had steady growth over the past two decades. Initially, the company focused on the domestic trade. We have a processing unit with a capacity of 150 MT per day for cleaning, grading and sorting various pulses. Subsequently, we became involved in international trading. We export pulses and other agri commodities to the Middle East, Africa and Europe. Our “Liberty” brand of kabuli chickpeas is well established in India and abroad. We import pulses from Canada, Brazil and East African countries. We also do merchant trading with the U.S.     

GPC:  What are the company’s plans for growth over the next five years?

Gaurav Bangeja: We want to spread our wings. We plan to expand our product profile and also establish branches abroad. To begin with, we are looking to have a branch office in one of the Gulf countries. We also want to diversify into related areas and increase our product lines. We are conducting research to develop value-added products made from pulses.  

GPC: What has been your experience as a second-generation entrepreneur in managing a family business?

Gaurav Bangeja: We cherish our family traditions. The secret of our success is a combination of ambition, sheer will to win and the willingness to take risks. The lesson I learned from my father is that willingness to take risks is an integral part of long-term success. It is a challenge to drive growth in a family business, as we have to keep our values and traditions, and at the same time adopt to changing times.