Kunvarji Group, one of India's leading commodities players is upbeat about the economic boom that is spreading across the country.
Though the name 'Kunvarji' came into existence in the nineties, commodity sector was a forte for the promoters of this firm when commodity broking was at its infancy in the late 60s.
With a very strong presence in the commodity spot market then, aggressively dealing into the business of procuring various commodities like castor, jeera, rape mustard seed, guar seed, guar gum etc for leading corporate houses, the company later diversified into the Securities Markets.
Today, Kunvarji Group is one of India's leading financial market players, providing one-roof trading solutions for commodities and securities markets. These days, the company is planning a major penetration into the commodities segment, especially in the western and northwest region.
In an exclusive interview to Commodity Online Special Correspondent Shailesh Bhatt, Kunvarji Group Managing Director Nayan Thakkar shares his vision on the commodities market.
There is a big question mark over futures trading with government blaming it for inflation. Do you think it will be banned, at least in agri-commodities?
As you are aware, there are various factors responsible for inflationary trend in the Indian economy. So far as agro commodities prices are concerned, the country witnessed uptrend because of short supply and lower than expected crops of certain agriculture commodities which put pressure on the prices. So we do not believe that commodity future trading should be blamed for this rise in prices.
If it is banned, what are the options ahead for firms like you? Will commodity futures in merely metals sustain your business since you have invested looking for a bright future in agri-commodities?
If it is banned, we do not see any impact on our commodity business because our business model is well-balanced and it has spread across all segments of commodities.
Can trading in agri-commodities benefit the farmers? How?
Certainly yes. With introduction of future trading in agriculture commodities, the bargaining power of the farmers has already gone up. It is not only helping the farmers to mitigate their future risk by way of hedging but it has helped farmers a lot for deciding their future crop pattern.
What is your take on spot exchanges?
We believe that the spot exchange will help us create organised market for underlining agriculture commodities. Unlike stock market, we have strong future markets but do not have strong and organised spot market for agriculture commodities. Thus, introduction of the spot market will provide a synergy to commodity futures market.
How do you view the government's proposed amendment on APMC Act? Will the entry of private players to APMC benefit the farmers?
Many state governments have already initiated amendments to the APMC Act which will pave the way for farmers for selling their agriculture produce outside the purview of APMC markets. As per the existing provision of the Act, farmers cannot sell their produce outside the APMC markets and as a result of this they are not getting the better realisation of their agriculture produce.
Should hedge funding be made official so that channeling money through other routes can be properly managed and accounted for?
The markets have to be ripe and well inhabited by more qualified players before allowing hedge funds to enter the market. The market is such a place where more participation generally makes it more efficient. However, hedge funds with their size, nimbleness and speculative agenda should be welcome only after the market structure has become strong enough to withstand their activities.
What are your plans for expansions both vertically and horizontally as far as 'Kunvarji' is concerned? Which field are you going to concentrate more -- equity or commodities?
'Kunvarji' group looks at the business in more passionate manner and we intend to expand in all areas wherever opportunity and logistics permit. Our group looks at the business as not merely expansion of client base and TWS network, but as expansion of knowledgebase and awareness about the advantages and utility of commodity futures and security market with equal fervour.
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