UPDATE 1-India not to extend futures ban to new commodities

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By Mayank Bhardwaj

NEW DELHI, July 23 (Reuters) - India has no plans to curb futures trading in more commodities and is likely to lift a ban on four items in September, the market regulator said, despite a report recommending futures should be discouraged.

In May, the government, under pressure from its allies to control soaring inflation, suspended futures trading in soyoil, potato, rubber and chickpea for four months.

However, Agriculture Minister Sharad Pawar and an official panel probing the impact of futures trading on commodity prices said in then there was no clear link between the two.

Commodity prices had risen despite the futures ban, B.C. Khatua, chairman of the Forward Markets Commission (FMC), told Reuters by telephone on Wednesday.

The government usually consults the FMC before taking any decision on commodity derivatives.

"It has already been established that there is no link between futures trade and price rise," Khatua, also a senior government official, said, adding that the ban on the four commodities was likely to be lifted in September."

India suspended futures in wheat, rice and two varieties of lentils in early 2007.