FMC dithers on lifting suspension

Resumption of hedging in 4 commodities in limbo.

Agri-commodity traders will have to wait for one more month to resume hedging in potato, rubber, chana and soy oil, as the commodities regulator, Forward Markets Commission (FMC), is yet to grant permission to exchanges to trade in these suspended commodities.

However, many traders and commodity exchange officials are doubtful if the suspension will be lifted as despite repeated assurances, FMC had extended it till November 30. On May 6, the regulator had suspended futures trading in rubber, chana, soyoil and potato for four months.

“Even if the regulator permits us to trade, our confidence is shaken because of past experience. It will be a huge task to bring speculators and hedgers across the country to the online platform again,” an exchange official said.

If the government wanted to resume trading, it would have acted favourably on applications filed for the permission three months ago, another official said.

“Neither did the FMC ask for fresh application, nor it granted permission in writing. In any case, a new contract takes about to month from the date of permission to materialise.”

Unupom Kausik, chief business officer of the National Commodity & Derivatives Exchange, the exchange worst-hit by the suspensions, said, “We are ready with the infrastructure. On getting the permission from FMC, we would start interaction with the hedgers on an one-on-one basis.”

However, FMC Chairman B C Khatua denied the possibility of further extension this time. While saying there is no need for such a permission, Khatua said that the regulator had not received any communication from the Department of Consumer Affairs and Agriculture Ministry in this regard.

“It is most likely that these commodities would be allowed for trading. No communication from the ministries means that the government has agreed to our request for resumption in trading in this set of suspended commodities. Hence, there is no need to issue a separate circular to each stakeholder of commodities market,” Khatua said.