Futures trade: No ban on more farm goods

The government on Monday said it has no plans to ban more farm commodities from futures market and hoped that suspension of trading in soya oil, chana, potato and rubber would not be extended beyond four months.

"I don't think any new commodities will be added," Agriculture Minister Sharad Pawar, who also heads Consumer Affairs Ministry that oversees the futures market, told reporters on the sidelines of a CII function.

The government had suspended futures trading of soya oil, chana, potato and rubber for four months till September 6 as part of measures to control inflation. This was in addition to last year's ban on wheat, rice, tur and urad.

When asked about possibility of extending the ban on the four items beyond four months, Pawar said: "Let's see what happens...I think that the decision is taken only for four months. I do hope time will not come to extend the four months period".

The minister said the decision to suspend futures trading was taken by commodity market regulator Forward Markets Commission (FMC) after much deliberation.

"The decision was taken by FMC about three days back. They have applied their mind and they ultimately came to this conclusion," he said.

Pawar noted that out of the four commodities on which ban was imposed last year, prices of two items have stabilised while rates of other two commodities increased.

Asked about the Abhijit Sen Committee report, Pawar said: "We have not taken a view about the report. Because if there are some specific recommendations, there are also separate views communicated, including that of the chairman (of the panel)."

Apart from the main report, Abhijit Sen Committee had submitted supplementary reports by four members, including the chairman Abhijit Sen, where they have expressed their personal views.  The Committee had been set up last year to study the impact of futures trading on prices of essential commodities.

The committee found no conclusive evidence of whether futures trading impacts prices of essential commodities or not. However, Planning Commission member Abhijit Sen, who headed the Panel, favoured continuation of ban on wheat, rice, tur and urad.

"There are two items where prices have stabilised. There are another two items whose prices have gone up irrespective of their delisting," he said.