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RPT-UPDATE 1-India seeks report on volatility in farm commodities
April 5, 2012 / 3:32 AM / 6 years ago

RPT-UPDATE 1-India seeks report on volatility in farm commodities

(Repeats story issued late on Wednesday)

By Mayank Bhardwaj and Ratnajyoti Dutta

NEW DELHI, April 4 (Reuters) - India’s food ministry has sought a report on high volatility in prices in futures trading of some farm commodities, Food Minister K.V. Thomas said on Wednesday, a week after the regulator banned trading in guar due to excessive speculation.

“I have sought a status report on volatility in rapeseed, chick pea and other commodities as well. I hope to get the report by April 10,” Thomas told Reuters.

The Forward Market Commission, which regulates the commodities derivatives trade, comes under the ministry of Consumer Affairs and Food.

Industry bodies had been asking the ministry for a probe into large scale manipulation in chana and oilseeds futures.

“Fundamentally agri commodities like chana and oilseeds are bullish due to lower production, but the problem is the sharp rally in prices,” said Chowda Reddy, senior analyst with JRG Wealth Management.

Chana has gained 39.8 percent and soybean jumped 30 percent since 2011.

India banned futures trade in guar from last week, a move that was seen denting confidence in the country’s nascent futures trade.

Commodity futures trade, which started about nine years ago in India, has witnessed bans and relistings of various farm products such as wheat, chana and sugar after excessive speculation, on the recommendation of the regulator.

Other agri-commodities like tur, urad and rice are yet to get re-listed.

On April 2, the commodity markets regulator had said it was planning a comprehensive review of agricultural commodities to help them align with physical markets. (Additional reporting by Siddesh Mayenkar in MUMBAI; Editing by Subhadip Sircar)

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