The Forward Markets Commission (FMC), the commodities derivatives market regulator, has suspended fresh positions in potato contracts during the staggered delivery period of 15 days.
A communiqué it issued yesterday referred to the “consistent rise in spot and futures prices of potato since March” and the “several regulatory measures, including imposition of special margins, increase in initial margin, introduction of staggered delivery, etc, to curb the excessive volatility in the prices”. However, it added, “in view of the continued price volatility”, it had decided on the extra step.
Potato has surged on the Multi Commodity Exchange by 12.3 per cent in the past two month to trade at Rs 1,298 a quintal for delivery in August. Turmeric for near-month delivery has surged by a staggering 35.5 per cent to trade at Rs 5,746 a quintal on the National Commodity & Derivatives Exchange. Other agri commodities, too, have seen a surge in prices.
The Commission has also taken measures on other commodities to control price rises. It imposed a 20 per cent non-cash margin on longs in soybean and soymeal in August contracts. The special margins were then raised to 40 per cent (20 per cent cash and 20 per cent non-cash) on longs in soybean and soymeal contracts with effect from July 30, an FMC release said.
Also, the special cash margin was increased from 15 per cent to 30 per cent on longs in potato contracts and it imposed a five per cent special cash margin on shorts effective August 1. The Commission also increased special cash margins on longs in turmeric contracts from 20 per cent to 40 per cent from July 27.
The regulator has observed that cardamom and turmeric contracts have shown very low levels of deliveries.