Futures trading of Tur may restart this year

Futures trading of Tur may restart this year, subject to a good crop production.

The commodity market regulator, Forward Markets Commission (FMC), may approach the government to lift the ban of futures trading to Tur by November, as initial reports suggest good production this year.

“The futures trading of Tur may be restarted this year, as initial reports are positive ( on crop production). By November we will get a clearer picture about the production, and then a decision can be taken,” said B C Khatua, chairman, FMC, on the sidelines of seminar here last week.

However, the FMC will wait till crop sowing in the Rabi or (winter crop) to assess the ban on lifting the ban on Urad.

The government had banned futures trading in tur, urad, wheat and rice in 2007. Wheat was relisted on the exchanges in May 2009.

Apart from Tur and Urad, futures trading on rice is also banned in the FMC. The only active futures trading in pulses in India today is for chana dal whose prices have been stable. The Centre had banned futures trading in sugar last year in view of surging domestic prices and the suspension period lapsed on September 30.

Sugar prices dropped significantly since January this year, buoyed by expectations of a bumper output in 2010-11.

However, in case of Urad and Tur, there was no sunset clause on the ban, and hence the FMC will have to approach the government to restart its trading on the exchanges.

The regulator will also meet the stakeholders to restart sugar futures contracts on exchanges after the festival season. "We will meet stakeholders after Diwali to finally discuss about the re-launch of sugar futures contracts on the exchange platforms,” said Khatua.

In India, pulses production falls short of demand and to meet the shortfall, imports have to be made. Government agencies were, therefore, directed to step up imports. In 2008-09, 2.48 million tonnes of pulses were imported.

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