High prices lead to
greater regulation of agri commodity futures
The two
back-to-back droughts and a delay in monsoon have led to a rise in agriculture
commodity prices. This increase is taking a toll on the health of
agriculture futures market. Market regulator SEBI has had the government move
in to contain rising commodity prices.
Short term knee-jerk measures like cracking
down on pulses traders haven't been able to improve supply situation. Long-term
measures are being discussed but yet to be implemented.
The chana
futures have gone the same way like urad and tur which were banned in early
2007 and never revived. In 2014, potato futures faced the same fate due to
lower crop produce and rise in prices. First margins were increased and then
positions on future contracts were disallowed. And the markets had just
about recovered from a suspension in castor seed futures this year.
Though
prices of pulses have almost doubled since the beginning of this year, they
gained 20 percent in the past two months. Chana prices have hit new highs
on the back of lower crop and availability. Urad, which is not traded on
futures exchanges, also hit new highs at Rs 196 a kg.
Commodity prices, however, have seen some decline in the last couple
of days.
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