Exactly a month after the Union government suspended futures trade in refined soyaoil, potato, chickpea (chana) and rubber for four months to control inflation, no commodity apart from potato has shown significant dip in prices.
According to the spot market data collected from NCDEX and private traders, refined soyaoil spot market prices, which was blamed for the spurt in edible oil prices, has risen by almost 11% since futures were suspended.
India, imports almost half of its annual edible oil consumption of around 12 million tonne, because of low oilseed production. Any volatility in the global market impacts the domestic prices. ?The rising prices of palm and soya in Malaysia and Indonesia, which are the major producers, pushes up prices at the domestic market,? a NCDEX official said.
The prices of rubber, mostly used by tyre makers, has risen by more than 12% since the suspension of futures trading was announced by the forward markets commission on May 6, 2008.
?The main reason for the upward swing in the prices of both these commodities has been their close interlink with global markets, where spike in crude oil rates has pushed up edible oil prices,? Debjyoti Chatterjee, research head, Mape Admisi Commodities said.
At present, crude oil is hovering around $120/barrel-$122/barrel after testing an all-time high of around $135 per barrel. As a consequence of this, crude palm oil prices was close to 4,000 Malaysian Ringgits per tonne in April. But have come down since crude oil has also retarded.
Potato prices in the spot market have dipped by around 12% in the last one month, mainly due to bumper output. ?We have been consistently saying that the prices of the commodities depend on fundamentals such as demand and supply, the futures trading only helps in discovery of the prices,? an official from the MCX said.
While chickpeas prices have largely remained flat because of increase in production. Out the four commodities in which futures was suspended, apart from potato has not shown any decline in their prices in the last one month.
Traders said that suspension of futures have deprived farmers in realising better prices for their commodities they produce.