FMC slaps 10% spl margin on guar futures to curb price rise

Commodity markets regulator FMC today imposed a special margin of 10% on futures contracts of guar seed and guar gum to curb price volatility.

In a directive issued to national commodity bourses, the Forward Markets Commission (FMC) said special margin of 10% would be imposed on the buyers of guar seed and guar gum traders on all contracts traded on the bourses.

Margin is a deposit that is required to be given by traders before entering into a pact to buy or sell the commodity at future date. The special margin would be over and above the initial margin, which varies according to exchanges.

Guar seed and guar gum contracts are being traded on five national bourses NCDEX, MCX, NMCE, UCX and ACE.

At NCDEX, prices of both guar seed and guar gum have risen by more than 70% to Rs 7,490 per quintal and Rs 20,700 per quintal, respectively, in the last one month.

A similar trend in prices was seen in other bourses too.

Guar prices are rising due to weak supply amid strong demand especially from exporters.

Futures contract is a contractual agreement, generally made on the trading floor of a futures exchange, to buy or sell a particular commodity at a pre-determined price in the future.