The Government has indicated that it may ban futures trading in certain agricultural commodities in view of excessive fluctuations in the commodity market. The Government banned futures trading in guar gum on March 26.
Mr K.V. Thomas, Food and Consumer Affairs Minister, said, “The Secretary in the Department of Consumer Affairs will give a report on the overall situation in the commodity market. The report is expected within the next 10 days. A ban will also be considered subject to the findings of the report.” This committee will consider the price movement reports in certain commodities before finalising its views.
The Ministry has already received a report on the price movements of eight agriculture commodities. These include pepper, potato, cardamom, menthe oil, soya oil, soya bean and chana. However, it has been found that prices of potato in the futures market have come down.
According to Mr Thomas, the Forward Market Commission (FMC) has been asked to ascertain whether there have been attempts to hoard commodities to influence the futures markets and if so, how these activities have been financed.
The Agriculture and Processed Food Export Development Authority recently found that some guar gum export has taken place despite a fall in domestic production. This raised suspicion that speculative activity in the futures market was being financed. Now, the Finance Ministry is also looking into the matter.
The issue of excessive speculation figured at a meeting between the Minister and the Chairman of the FMC, Mr Ramesh Abhishek. It was said that the rise in the prices in recent months of certain agricultural commodities, including some essential commodities, have come to the notice of the Government. There have been complaints in some quarters that excessive speculations in future markets have also contributed to the price rise.