Govt lets futures ban on potato, 3 others lapse

The government has let the ban on futures trading in four commodities — potato, soyoil, chana and rubber — to lapse. This development comes after inflation eased to single-digit levels.

A four-month ban was imposed on May 6 on futures trading of the four commodities, which was later extended till November 30.

As there was no fresh notification from commodities market regulator Forward Markets Commission (FMC) for extending the ban, it is considered to have lapsed after the due date, a senior official said, adding, “There is always scope for putting a fresh ban, if the government feels it is necessary to control prices.”

The ban, however, continues on four other items — wheat, rice, urad and tur, which were suspended from futures trading for an indefinite period early last year.

Last week, Consumer Affairs Minister Sharad Pawar said the government would not like to take any step that may fuel prices of rice and wheat in the next 4-5 months.

He also had said a decision on lifting of the ban on futures trading would be taken by the expiry date of the restriction period.

FMC Chairman B C Khatua also recently said he was hopeful of lifting the ban as inflation had eased. The regulator had also sent a note to the consumer affairs ministry, favouring removal of ban on the four restricted items.

Rubber prices had slumped to Rs 66 a kg on November 28 from record Rs 142-level on August 28. Prices of refined soyoil (ex-factory) have come down to Rs 47 from Rs 57 a kg during the same period.

Chana prices remained stable at Rs 30-40 a kg in major cities, while potato remained mostly unchanged at Rs 5-10 a kg during the period under review.