Farmers, processors optimistic as commexes resume futures

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New Delhi, Dec 3: After more than six months of suspension, trading in refined soyaoil, rubber, chana (chickpeas) and potato is all set to resume on Thursday following a go-ahead from the commodity markets regulator, Forward Markets Commission (FMC).

The government had suspended futures trading in four commodities in May 2008 to tackle rising prices, despite strong opposition from FMC and all exchanges. However, after extending it by two months on September, the notification suspending futures trading was allowed to lapse on Sunday. The re-start could not have come at a better time for farmers who after burning their fingers in taking up potato cultivation in a big way this year, are bullish about next year and plan to sell their produce through the futures trading platform of the commodity exchanges in a big way. Of the four suspended commodities, potato was largely traded on MCX platform, while chana and soya oil were actively traded on NCDEX and rubber on National Multi-Commodity Exchange of India.

“Following the ban, we had to release those stocks which were meant for futures trading in the market which led to further decline in prices,” Dungar Singh, a farmer who took up potato farming in around 100 acre of agricultural land around Agra, told FE.

Uttar Pradesh produces about 14 million tonne of potato against an average of 10 million tonne during 2008. The cumulative production in the country was to the tune of 25 million tonne. Uttar Pradesh accounts for close to 60% of the potato produced in country, followed by West Bengal.

A MCX official said that FMC has asked some changes in the potato (Agra, Uttar Pradesh) contracts prior to resuming trading while the futures trading on potato (Tarkeswar, West Bengal) will resume from Thursday.

“This (the resumption of futures trading in refined soyoil) will help in price stabilisation and help price discovery,” Rajesh Agrawal, co-ordinator, Soyabean Processor Association of India (SOPA) said. Refines soyoil was one of the largest volume grossers in the commodity exchanges.