Commodity futures trading will enter a new phase Saturday with wheat and rice being traded in futures. They will be the first foodgrains traded in futures, and account for bulk of traded volumes in grains. | Prime Minister Atal Bihari Vajpayee will inaugurate futures trading in wheat and rice at Ahmedabad-based National Multi-Commodity Exchange of India Ltd. (NMCE). |
| Futures trading in these grains was banned along with that in most other commodities by the British rulers of India at the beginning of the second World War. |
| The suggestion to lift the ban on futures trading was made by the Kabra committee in early-1990s, though the committee expressed some reservations about trading in staple foodgrains. |
| Food and consumer affairs minister Sharad Yadav, who has been pursuing futures trading in these grains, maintains futures will bring benefits to both farmers and consumers. |
| He also expects it to lead to price rationalisation and provide the growers access to a national market. |
| Futures trading in wheat and rice would help traders avoid storage of excessive stocks and bring down carrying cost. |
| Access to price information from mandis will help farmers to get better prices and reduce arbitrage. |
| NMCE would conduct on-line futures trading in wheat and rice at 48 locations through 214 member-traders, on a delivery-backed system. |
| Central Warehousing Corporation (CWC) will handle NMCE deliveries through a reliable warehouse receipt system. |
| CWC has a network of 493 owned warehouses with storage capacity of 9.3 million tonnes as well as access to additional capacities of state warehouses where CWC has 50 per cent share. |
| NMCE is promoted by CWC,National Agricultural Cooperative Marketing Federation of India (NAFED), National Institute of Agricultural Marketing (NIAM), Gujarat Agro-Industries Corporation Ltd. (GAICL) and Gujarat State Agricultural Marketing Board (GSAMB). |
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