FM hints at futures ban on more articles

"If rightly or wrongly, people perceive that commodities futures trading is contributing to a speculation-driven rise in prices, then in a democracy you will have to heed that voice,'' Chidambaram said in an interview in Madrid.

Prime Minister Manmohan Singh's government is under pressure from communists and other allies to ban futures trading in cooking oil, sugar and other commodities, saying it stokes speculation and fans price increases. The government halted futures trading in wheat and rice last year and lentils in 2006 to check a surge in domestic prices of the commodities.

"The pressure is to suspend a few more food articles,'' Chidambaram said without identifying the products.

A panel formed by the government under economist Abhijit Sen to study the impact of futures trading on prices of staple foods, this month suggested maintaining the ban on rice and wheat. It didn't recommend a ban on any more commodities, saying there was no conclusive evidence to suggest futures trading contributed to price increases. A futures contract is an obligation to buy or sell a commodity at a set price for delivery by a specific date.

Domestic traders and producing and consuming companies are the main participants in India's commodity exchanges, compared with the 13 million individuals who invest in stocks.