FMC mulls allowing relaunch of sugar futures in 8-10 days

After over two months since the ban on sugar futures lapsed, commodity markets regulator FMC today said it is mulling grant of permission to commodity bourses to relaunch sugar contracts for futures trading in about ten days time.

"We are planning to allow the exchanges to relaunch sugar futures contracts in 8-10 days," Forward Markets Commission (FMC) Chairman B C Khatua told PTI.

The sugar contracts from January month onwards is likely to be made available for futures trading after a meeting with the stakeholders and exchanges, he said.

The meeting with the concerned stakeholders will be convened in a day or two, he added.

Food and Agriculture Minister Sharad Pawar had recently said that FMC has right to decide on allowing sugar futures.

Commodity exchanges like MCX and NCDEX said they are ready with the sugar contract for launch at any time.

The government has allowed the ban on sugar futures to lapse on September 30.

The ban on the commodity was imposed in May 2009 when prices were rising.

After the lapse of the ban, the regulator however did not permit immediate relaunch of the sugar futures before knowing the country's likely sugar production this year.

According to official estimates, after a gap of two seasons, India is estimated to see higher production of 24.5 million tonnes of sugar in the 2010-11 season.

This is higher than the country's demand of 23 million tonnes.

Buoyed by increased supplies, retail sugar prices have declined sharply from the peak of nearly Rs 50 a kg  in mid-January to Rs 30 a kg now in the national capital.

India is the world's second biggest producer but the largest consumer of sugar.

The sugar season runs from October to September.