No case now to suspend futures trade in farm products, says Khatua

Scotching speculation the government is planning to curb futures trade in essential farm goods to cool inflationary pressure in food items, Forward Markets Commission (FMC) Chairman B C Khatua today said there is no such case as of now.

“Food inflation is high this time around due to a surge in prices of fruits, vegetables, milk and fish. None of these commodities are traded in the futures markets. So prima facie, there is no case for suspending futures trade in any of the listed contracts,” Khatua said.

There were concerns that the government may consider suspending futures trade in some essential commodities in its bid to tame runaway food inflation.

Data released today showed food article inflation for week ended January 1 fell to 16.91 per cent from 18.32 per cent in the previous week, which was a 23-week high.

Talk the government was considering suspension of futures trade in some commodities was triggered by Khatua’s presence at a high level meeting chaired by Finance Minister Pranab Mukherjee Wednesday on measures to tackle food inflation.

Khatua said though he was called for the meeting, he was not part of any discussion on suspending futures trade in essential commodities.

“As far as I know, there is no policy decision so far on banning futures trade in any commodity,” he said.

Some commodities, especially sugar, saw futures contracts sliding Wednesday on fears of government curbs on trade. Earlier today, the finance minister said the government will announce steps to tame inflation later in the day.