Some agri futures may be banned

The government might ban futures trade in agriculture commodities that saw high price volatility, Food Minister K V Thomas said on Wednesday.

At present, futures trade in urad, tur (arhar) and rice is banned, while it is permitted in wheat, sugar, soya oil, mustard seed, soyabean and some others. There are five national and 16 regional exchanges in the country. The Forward Markets Commission (FMC) regulates these bourses.

“We have asked FMC to carefully watch the price movement of some agricultural commodities and see to it that there is no unnecessary price fluctuation. If the need arises, on those items, where high fluctuation is seen, they will be out of the futures market,” Thomas told reporters.

He added the price situation in the futures market would be reviewed with FMC this week.

The Commission is already monitoring the price movement of five agricultural commodities — potato, chana, soyabean, soya oil and mustard seeds. It has asked exchanges to charge a higher deposit money to trade in commodities such as soyabean, mustard seed, soyameal and turmeric early this month.

FMC Chairman Ramesh Abhishek had said recently that he was keeping a close watch on these essential items to curb any speculation and price increase. “New steps will be taken as and when required.”

In the wake of a poor monsoon, prices of essential commodities are on rise in most parts of the country.

Monsoon, crucial for Indian agriculture, is deficient by 22 per cent in the country. Poor rains have affected sowing of major kharif crops like rice, pulses and oilseeds. According to FMC data, the turnover of commodity exchanges rose by 8.95 per cent to Rs 41,71,803 crore till June this year, against Rs 38,29,230 crore in the same period last year.