Govt to take call on lifting wheat, rice futures ban

The government will take a decision on lifting the ban on futures trading in wheat and rice after it reviews production, prices and procurement of the two crops in May, consumers affairs secretary Yashwant Bhave said today.

The government had banned futures trade in the staple food grains, along with tur and urad, in 2007 to stem rising prices. Subsequently, futures trading in chana, soy oil, potato and rubber were also suspended in May 2008 until November 2008.

The ban on futures trade in wheat, rice and the two pulses still continues.

A panel of experts under planning commission member Abhijit Sen had concluded that the futures market only provided a platform for price discovery and was not responsible for fluctuations in the price of any commodity.

Bhave said, before lifting the ban on wheat futures trade, the government will wait for the third advance estimates of crop production.

The second advance estimates of crop output pegged 2009 wheat output at 77.8 million tonnes, down 1 per cent on year. Though wheat output is quite near last year’s record 78.6 mln tn, there is concern that production estimates could be subsequently lowered due to a warmer than usual winter in north India.