FMC to hold talks on resuming sugar futures after Diwali

Commodity markets regulator Forward Markets Commission (FMC) today said it will hold discussions with the sugar industry and commodity exchanges on resuming sugar futures trade after Diwali.

The Centre had banned futures trading in sugar in May last year to tame surging domestic prices and the suspension period lapsed on September 30.

"We will meet stakeholders after Diwali to finally discuss about the re-launch of sugar futures contracts on the exchange platforms," FMC Chairman B C Khatua said.

Diwali festival is on November 5.

Sources said that FMC is mulling to allow sugar contracts from December onwards, so that during that time the sugar mills may have crushed enough cane harvested in current year.

The commodity exchanges like National Commodity and Derivative Exchange have already applied with the regulator for approval of sugar contracts, they said.

FMC, which regulates 23 commodity exchanges, is waiting for the completion of the festival season before giving permission to re-start sugar futures, as by this time, the government is expected to get the fair estimate of total sugar production in the 2010-11 season and surplus availability, sources said.

India, the world's second biggest producer but the largest consumer, is likely to achieve a higher production than the annual demand in 2010-11 (October-September) after two years of low output.

The country's sugar production is estimated at 25 million tonnes in 2010-11, while demand is pegged at 23 million tonnes.