Trading in seven commodities under scanner

The government on Friday decided to set up an expert committee to examine if there is a need to ban futures trading in seven farm commodities, which have witnessed a sharp jump in prices recently. “ The committee will study and recommend whether there is a need to ban futures trade in some agricultural commodities,” sources said, adding that the committee is expected to submit the report within 15 days.

The decision in this regard was taken at a meeting between food and consumer affairs minister K V Thomas and commodity market regulator Forward Markets Commission (FMC) chairman Ramesh Abhishek on Friday, the sources said.

The expert committee will study in detail the excessive price volatility witnessed recently in seven farm commodities — chana, soyabean, refined soya oil, pepper, cardamom, guarseed and guar gum in the futures market — they added.

In last few weeks, FMC has taken several steps to curb speculation and volatility in these commodities. It has restricted traders’ participation by means of imposing heavy margin amount and reducing position limit.

In case of guar gum and guarseed, the commodity exchanges have been asked to terminate all existing contracts from trading.

However, commodity experts are of the view that price increase in some commodities has been due to supply-demand mismatch but in few commodities like guar, there has been some speculation.

Source : The Financial Express