Rapid advancement in technology brought a fresh change to agricultural and commodity trading. A few decades back, agricultural products and commodities trading used to take place at local markets and mandis. Middlemen, intermediaries, and brokers had a large say in the price control mechanism.
Govt. rules & regulations and protectionist policy also made it tougher for the buyers and sellers to receive the benefits. Things changed for good with the advancement of electronic platforms and better information sharing between stakeholders. There are dedicated agricultural product trading platforms in India like NCDEX and NMCE. Besides, trading also goes on in the open market albeit with greater transparency and better information sharing. As the crop yield got better with sustained policy changes, the country started looking towards exporting surplus items. Over the years, there has been a great demand for Indian agricultural products like rice (basmati & non-basmati), pulses, oil, cotton bales, sugar, maize, etc. Besides, the export there has also been a strong domestic demand within the country and close neighbors. Agro commodities buyers and sellers have been on the rise with a higher level of consumption. Challenges have been to fulfill the growing demands of the buyers. Though buyers have greater awareness than before, yet they find it challenging to purchase directly from the sellers. This is mainly because of a buyer-seller-friendly common centralized platform.
Identifying the opportunities, spirited entrepreneurs came up with a brilliant idea for a trade-enablement platform. Some of the prominent ones are Tradologie, IndiaMart and TradeIndia. Sellers and buyers can register themselves on the platform and start posting their requirements. The credibility of buyers and sellers is verified by cross-checking relevant documents. Once the initial paperwork is done, buyers and sellers can start posting their requirements. In this kind of trading model, the role of middlemen is eliminated. As a result, buyers and sellers get the best value out of business transactions. Payment and financial transaction issues are also sorted with the involvement of a trade-enabling platform.
With the passage of time, some of the existing platforms have come up with interesting innovations. Earlier, the idea was to design and develop an inquiry-to-lead generation platform. Now the focus has shifted towards the inquiry-delivery model. As the trading activities picked momentum, sellers realized that mere lead generation does not result in order confirmation. To address such a concern, trade enablement platforms came with a path-defining idea of reverse bidding. The concept of reverse bidding involves real-time interaction between sellers and buyers. Once the buyer requirement is posted, sellers start quoting individual prices. The seller with the lowest price is chosen to execute the deal. There is also additional window time for further bargaining and negotiation. The cornerstone of the concept is augmented value for both buyers and suppliers.
Conclusion: With the advancement in trade & technology, the market has shifted from the seller-centric to the buyer-centric model. If the buyer receives optimum value in agricultural products and commodities trading, sellers naturally go up in the value chain. Word of mouth further reinforces the seller’s credibility and position. In a hyper-competitive world, it will be beneficial for Agro Commodities Buyers & Sellers in India to leverage the technology and reap the benefits of the trade-enablement platform.
For more information about agricultural products and commodities visit: https://www.tradologie.com/lp/agri-commodities.html
