FMC consulting commerce ministry on lifting ban on guar futures

Written by Press Trust of India | New Delhi | Updated: Nov 24 2012, 04:33am hrs
Commodity markets regulator FMC said on Friday it is in a consultation process with the commerce ministry on the issue of lifting ban on guar futures. In March this year, FMC had banned futures trading in guarseed and guargum, which is largely exported for use in oil and gas industry, to curb price volatility and speculation.

Last month, the matter was discussed at the meeting of the government-constituted Advisory Committee, which suggested relaunch of the guar futures.

"The Advisory Committee has proposed relaunch of guar futures but we have not yet taken the decision. We are consulting with the Directorate General of foreign Trade (DGFT)," Forward Markets Commission (FMC) Chairman Ramesh Abhishek told PTI.

Guar exporters have expressed their concern with the DGFT, an agency that promotes and facilitates trade under the Commerce Ministry, he added. However, the regulator said it was "not in a hurry" to take decision on guar futures as its priority was to ensure transparent platform for price discovery and hedging.

Leading agri-commodity bourse NCDEX has also sought FMC to give permission to re-list guar gum and guar seed futures.

"Guar gum exporters, who were hedging on the exchange platform, are affected due to the ban. Prior to ban, prices rose due to doubling of export following a rise in demand and not due to speculation," an analyst said. In June, when sowing of guar seed had begun, spot prices were ruling at Rs 6,000 per quintal. Now, the rates have touched Rs 8,000 per quintal, he said.