NCDEX making inroads into Bihar’s maize market

From doing odd jobs for traders to setting up a two-room full-fledged office of his own in a span of two years, 24-year-old Karan Kumar has come a long way. Kumar has emerged as the face of young graduates who are gearing up to hook Gulab Bagh on to the online trading platform.

Kumar is among the few young traders spotted by NCDEX, an online commodity futures exchange, when it arrived in the sleepy town to inaugurate its maize contract two years ago.

Kumar delivered 3,500 tonnes of maize on the NCDEX trading platform last year and hopes to increase this substantially this year. While Karnataka and Andhra Pradesh grow maize in the kharif (summer) season, it is planted as rabi (winter) crop in Bihar. Maize output in Bihar is expected to be higher at 10 lakh tonnes this year against 8 lakh tonnes last year. Maize prices have increased from ₹800 a quintal to ₹1,150 in the last two years as traders’ now benchmark it to NCDEX prices.

The buoyancy in trade has led to increase in warehousing capacity in Gulab Bagh to 12 lakh sq feet from one lakh sq feet.

Real estate prices have zoomed to ₹1 crore an acre from ₹30-40 lakh as lands near the mandi are being developed as warehouse hubs.

Leading commodities players including Cargill, Glencore, Louis Dreyfus Commodities, Godrej Agrovet, Amrit Feeds and Suguna Feeds have hired warehouses to stock maize. New hotels have sprung up to accommodate traders coming from Delhi, Mumbai, Rajasthan and Gujarat.

While things may look rosy today, it was not an easy task two years ago for Pradeep Kumar, head of NCDEX Business Group, to make the mandi work for six days. Since the market was open only for two days, maize prices were always under pressure due to bunching of arrivals, he said.

“The potential in Gulab Bagh is huge as it also harvests good wheat and paddy crops. We have not even scratched the surface,” he said. Currently, big traders aggregate the produce from 10-15 small farmers and sell them in the mandi, but farmers are aware of NCDEX prices, says Kumar.

Jai Prakash, Purchase Officer, Glencore India, said the company has booked warehouse capacity for 10,000 tonnes and bought 5,080 tonnes, so far. “The quality of maize arrivals is not matching our specification. It deteriorated after the recent rain,” he said.

Anand Kumar Pandit, who has been in the trade for the last 10 years, hopes that the infrastructure in the mandi will also improve along with the growing business.

On a day, about 5,000 trucks arrive and it becomes difficult even to enter the market if it rains, he rues.

Creaking infrastructure and security has become a big issue ever since the Government moved the market from the APMC administration, he said.

The writer was in Gulab Bagh in Bihar’s Purnia district at the invitation of NCDEX

COMMENT NOW