Commodity market regulator Forward Markets Commission (FMC) has banned launch of new Tarkeshwar potato contracts to curb price volatility.
In order to overcome excessive volatility in potato prices, the Commission has decided not to allow launch of potato (Tarkeshwar) November 2012 delivery contract, FMC said in a press release on Wednesday.
Currently, there are three monthly contracts -- August, September and October – being traded on MCX.
While NCDEX trades potato with Agra as delivery centre, MCX has both Agra and Tarkeshwar contracts. Turnover on Tarkeshwar contract in MCX has jumped 77 per cent to Rs 12,264 crore in July from Rs 6,916 crore in June.
The volume also increased 64 per cent to 107,610 kg from 65,370 kg in June.
Turnover in the Tarkeshwar contract peaked to Rs 49,597 crore in March while volumes touched 539,310 kg.
Turnover and volumes have been coming down steadily after FMC imposed various restrictions to bring down volatility in the contract.
Special margin
FMC doubled the margin on all potato futures contract to 30 per cent in a bid to arrest the price volatility.
A margin of five per cent was imposed on the sell contracts. Fresh positions were also banned during the staggered delivery period of 15 days.
In last one week, potato prices have fallen four per cent to Rs 987 a quintal on Wednesday from Rs 1,027 recorded on August 1.
Sowing hit
Sowing of potato seed for this kharif season is affected in Maharashtra and Karnataka due to delay in South-West monsoon. There were also reports of crop damages in Andhra Pradesh and Karnataka.
Overall potato production is expected to be lower by 10-15 per cent at 34 million tonnes this year due to lower production in Bihar, West Bengal and certain parts of Uttar Pradesh.
NCDEX September potato was at Rs 1,270 – down Rs 22 from the previous close.