FMC mulls futures ban in select farm items

Commodity market regulator,the Forward Markets Commission,said it could ban futures trading of select farm commodities

Written by ENS Economic Bureau | New Delhi | Published: July 27, 2012 1:04:36 am

Commodity market regulator,the Forward Markets Commission,said on Thursday it could ban futures trading of select farm commodities,if required,but wouldn’t allow traders to manipulate futures prices,as fears mount over the damaging impact of monsoon on summer crops.

“We are going to be very alert and not allow traders to manipulate prices. We will ban if need be. We are aware of deficient monsoon rains impacting crops,” Forward Markets Commission (FMC) chairman Ramesh Abhishek said. Abhishek also briefed food minister KV Thomas about the price situation in the futures market.

The statement came a day after Thomas warned that the government might ban futures trading of farm commodities that witnessed sharp fluctuation.

Although futures market in India is still in its nascent stage,the spot market tends to track the rise in futures prices of many commodities.

Abhishek said the FMC has been taking steps to curb speculation and price volatility. “We saw price movement in turmeric and we have increased margin on it from 20 per cent to 40 per cent”. India has received 22 per cent less than normal monsoon rains so far and the worst-hit states are Karnataka,Maharashtra,Gujarat and Rajasthan. Poor monsoon has affected sowing of summer crops such as paddy,coarse cereals,pulses and oilseeds. FMC is monitoring price movement in chick pea,soyabean,soya oil,potato,sugar among others. FE

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