Following the effects of delisting futures trading on the four agri-commodities by the government in 2007, the futures trading volume of major agri-commodities listed on the two national commodity exchanges fell sharply by 30% from April to August.
The government decided to delist the futures trading in urad and tur in last January and put ban on rice and wheat futures in the last Union Budget. Total agri-commodities futures volume on NCDEX and MCX has registered at Rs 3.13 lakh crore in the five months (April-August) of FY07-08 from Rs 4.49 lakh crore in the same period last year, down by 30%. ?I think the two primary reasons that have impacted the futures trading volume are the restrictions imposed on position limits of near month contracts and banning of futures trading in four agri-commodities,? Navin Mathur, head-commodities, Angel Commodities Broking Ltd told FE. Large volume of futures trading in agri-commodities is being generated at the NCDEX in past three years. For maintaining a constant vigil against speculative futures trading through frequent hikes in penalties on non-delivery of products and squeeze in outstanding positions, it has lost clients? participation on its platform in a big way over the past six months, a NCDEX official said. ?Surveillance on wild speculation in commodity futures trading on its platform has impacted the agri-commodities volume,? said a NCDEX official.
?As per our understanding, irrespective of volumes, surveillance has to perform its duty as performed by ?1? & ?0? in the Boolean system where something is either true (read correct) or false (incorrect),? Joseph Massey, deputy MD, MCX said. Monthly trading volume on NCDEX has down by 38% to 54,157.62 crore in August 2007 from Rs 86,995.53 crore registered in April 2007. Total monthly volume on MCX has also fallen by 24% to 6,453.94 crore in August 2007 from 8,541.85 crore in April 2007.