No plan to ban guar seed futures trading, says FMC

Mumbai, Nov 29 | Updated: Nov 30 2006, 09:24am hrs
Commodities market regulator the Forward Markets Commission (FMC) has stated that there is no move to ban futures trading in guar seed or guar gum. The reiteration of FMC comes on the heels of fresh rumours of a possible ban on futures trading in the narrow commodity that finds huge volumes on the National Commodity & Derivatives Exchange (NCDEX) Ltd.

The present regulatory measures in regard to guar seed are stringent and are similar to those in sensitive commodities like food grains and pulses. However, the regulator is monitoring the trading in guar seed and guar gum very closely and taking all steps to strengthen regulation where necessary, FMC stated in a press release.

It is to be pointed out that FMC had earlier convened a meeting of various Trade Associations, Federations Chambers of industry on August 9, 2006 wherein representatives of the Indian Guar Gum Manufacturers Association stated that they were not in favour of prohibition on the futures trade in guar seed/guar gum.

They specifically stated that at the end of the day trading in an official exchange is better than the unofficial exchanges of the past. They however, gave certain suggestions for improvement which are under consideration, FMC said.According to market participants, there are rumours about ban on certain agri commodities at regular intervals.

This is just one of such regular rumour that has no basis, a delear at a commodity brokerage house stated.

India accounts for 80% of the total guar produced in the world and 70% is cultivated in Rajasthan. Apart from Rajasthan, it is being grown mainly in Gujarat, Haryana and Punjab.

It is also grown in some parts of Uttar Pradesh and Madhya Pradesh. Based on the prevailing market price, the cost and volume of trade of the potential Guar market has been arrived at based on the 2003-04 estimated production of 85.7 lakh quintals of guar seeds and is valued at Rs 1002.83 crore.