MUMBAI Commodity futures turnover in India fell for the first time since inception in the fiscal year ended March 31, led by a decline in volume in bullion trade, and suspension of guar futures.
India, the world's biggest buyer of gold, and second biggest producer of wheat, allowed futures trading in 2003 for local participants, and foreigners, who cannot trade in the space, can participate through stakes in commodity exchanges.
"This is the first fall since 2003... the first reason is suspension of guar futures and the price correction in metals is another reason for a drop in value," said Kishore Narne, associate director at Motilal Oswal Commodities Broker.
India suspended guar futures in March 2012 on allegations of excessive price volatility, though the regulator has yet to decide on the re-launch of the commodity.
Cumulative value of trade fell 5.95 percent to 170.47 trillion rupees in the fiscal year ended March 31. Bullion volumes fell 22.78 percent to 78.63 trillion rupees.
If commodity transaction tax (CTT) comes into force, we could see another 10-15 percent fall, said Narne.
India proposed to levy a CTT of 0.01 percent on non-agricultural commodities like gold, silver, base metals, and energy products.
(Reporting by Siddesh Mayenkar; Editing by Anand Basu)