Commodities ban likely to go on its own

Trading in rubber, chana, soyoil and potato was suspended on the insistence of Left parties.

At a time when several opinions are being expressed on the resumption of futures trading in the suspended agricultural commodities, Yashwant Bhave, secretary, Department of Consumer Affairs, said he believed the suspension imposed in May, would be lifted automatically.

“The matter falls under the jurisdiction of the commodity markets regulator — the Forward Markets Commission (FMC). Hence, the FMC should take necessary action. I believe the suspension will be lifted automatically as no discussion on this issue has taken place so far, at least to my knowledge,” Bhave said over phone. “The government has neither issued any order so far, nor discussed the issue with the FMC.”

On May 6, the FMC had suspended futures trading in rubber, chana, soyoil and potato for four months. Earlier, four other commodities were delisted from futures trading. Resumption of futures trading in these commodities requires permission from the ministry.

Though futures trading in the above four suspended commodities can resume automatically, exchanges will have to seek the FMC’s permission to launch new contracts.

The suspension was imposed in view of strong resistance from the Left parties, accusing futures trading for the sharp rise in spot prices of commodities and thereby, causing inflation.

But, as the Left parties have now withdrawn support to the government, there are hopes to resume futures trading in these commodities.

The three national commodity exchanges — the Multi Commodity Exchange of India (MCX), the National Commodity & Derivatives Exchange (NCDEX) and the National Multi Commodity Exchanges (NMCE) — have already applied to the FMC for fresh approval for the re-launch.