"Statements made by some of the key policymakers... on the relevance and effectiveness of futures markets in commodity, particularly essential commodities, have affected the market sentiments," NCDEX managing director P H Ravikumar told PTI.

He was replying to a query on why there has been a severe impact on the exchange's turnover during the last one year. Turnover at NCDEX, the leading agri-commodity exchange, has declined to Rs 33,501 crore (Rs 335.01 billion) during June 1-15, 2007 from Rs 36,796 crore (Rs 367.96 billion) during previous fortnight, according to the data released by the Forward Markets Commission.

The turnover was as high as Rs 63,000 crore (Rs 630 billion) during the first fortnight of September last year. Ravikumar said statements having negative impact on the futures markets were being made from June last year.

The participants have a choice to take part in other market segments like stock markets where there were no such issues, he said. "The market has been built by exchanges and regulator over the last three years and to regain the market confidence it would require strenuous efforts," he said.

Ravikumar also attributed the frequent changes in margin and open interest position for the decline in its turnover.

"Smaller players cannot pay more margin. For proper price discovery, participation should be maximum," he said, adding that the moment open position limit was reduced nobody would give delivery.