The government said on Saturday the monsoon situation is far from alarming as of now and official warehouses are bulging with grain stock, which would assuage the pressure of below-normal rains on farm production.
Speaking on the sidelines of a commodity market event, finance secretary Arvind Mayaram also sought to allay fears of crude oil supply disruptions in India because of the unrest in its second-largest exporter Iraq, stressing the country?s long-term crude supply scenario is stable, although the government is keeping a vigil on oil prices.
Analysts feel any rise in crude oil prices, which hit a nine-month high on Friday, could potentially delay the government?s plan to deregulate diesel price soon, unless a major subsidy cut is announced.
The secretary also called for improving the depth of the commodity market in a manner that it is able to ?provide some price stability over a longer period of time and to enable the government to deal with inflation more effectively and efficiently?.
Commodity analysts say the secretary?s comments hinted the government might not suspend the futures trading of any farm item, as was speculated after Narendra Modi became PM. A Modi-led panel had in 2011 submitted a report to then PM Manmohan Singh, suggesting that futures trading of select items be banned to curb prices, among others.
Commenting on the monsoon, Mayaram said: ?The Met department prediction shows a little less rain than average. It is not alarming at this point, but we have to watch. We believe we have a strong reserves position.?
As of June 1, grain stocks with official agencies hit 62.23 million tonne, more than double the buffer and strategic requirement.