Govt considering lifting ban on chana futures

The government is considering lifting ban on futures trading in gram (chana dal) in order to ensure better price realisation for farmers at the time of harvest.

Market regulator Sebi suspended introduction of any new contracts in chana in June last to curb speculation and check retail prices.

According to sources, the Prime Minister's Office is actively considering a proposal to allow chana futures trade. It has asked comments from ministries concerned, including agriculture and finance, on the same.

The Agriculture Ministry is in favour of the proposal as it is more concerned about ensuring better prices to farmers for the rabi (winter) pulse crop, the harvesting of which will begin in full swing in the coming weeks, they said.

The ministry is of the view that re-launch of chana futures would help farmers know the likely future price of the commodity and hedge their produce against price risk.

In the absence of the future trading in chana, experts in commodity futures market said that farmers could end up selling their produce to traders in the spot market without knowing the price trend and may end up getting less rate.

The commodity futures market helps discover rates in a transparent manner on the online platforms of the national commodity derivatives exchanges, they said.

It may be noted that pulses prices are under downward pressure in anticipation of record 22.14 million tonnes of production this year buoyed by good rains and better support price. Rabi pulses, including chana, are ready for harvest.

As per the government's second estimate, the country's overall chana output is pegged higher at 9.12 million tonnes as against 7.17 million tonnes in previous year.

The government wants to ensure farmers get better prices so that they continue growing pulses in the coming years and reduce the country's dependence on imports.