Around six-month-old suspension of futures trading in four agriculture commodities lapsed on Sunday night without any formal notification by the government for extension of the suspension.
However, sources said lapse of the notification does not necessarily mean that futures trading in refined soyoil, rubber, potato and chana (chickpeas) could resume immediately as the commodity markets regulator Forward Markets Commission (FMC) has to formally issue an order to the exchanges signalling the resumption of futures in these four farm commodities.
?Until the government gives a clear nod to the FMC to issue orders for resumption of futures, no trading can start in the four commodities. However, technically the earlier order has lapsed as no order for extending it has come from the government till now,? a senior government official said.
He said some intimation from the government is expected in the next couple of days only then it will become clear whether normal trading can resume in the four suspended commodities. ?Technically, as per the earlier notification, the more than six months old suspension has lapsed, but whether normal futures trading can re-start is not clear,? the official added.
India suspended futures trading in rubber, potato, refined soyoil and chana in May to tame surging inflation that has threatened to cross the two-digit mark. Initially, the suspension was for four month ending September 30. But, despite the suspension of futures, prices of most commodities barring potatoes rose in open market because of fundamental factors.
On September 30, the government extended the suspension till November 30 as inflation was still not under control.
But, traders said since September, prices of rubber, refined soyaoil, chana and even potato has dropped by almost half mirroring their trend in international markets and also because of near-normal kharif crop production.
?Headline inflation is also now comfortably into the single digit and should go even further, giving no reason for the government to continue with the suspension,? a commodity analyst in a Mumbai-based brokerage said.
India had earlier banned futures trade in wheat and rice in 2006 following complaints from its then the Left partners that futures trading fuelled inflationary pressures.