After suspending futures trading in guar gum and soybean, the department of consumer affairs is keeping a close watch on the price movements in the futures market of mustard seed, mentha oil, cardamom, chana and turmeric.
Officials said the department won’t mind recommending suspending futures trade in these commodities to the regulator, the Forward Markets Commission (FMC), if there is any unusual movement in futures prices.
In the futures market, between December and April, mentha oil prices increased 83.98 per cent, cardamom by 59 per cent, and chana by 10.4 per cent. Though, turmeric prices fell 25.4 per cent during the period.
To deliberate on the measures to curb this sharp increase in future prices of five commodities, FMC Chairman Ramesh Abhishek has been summoned to the capital tomorrow. He is expected to meet consumer affairs minister K V Thomas.
Officials said though technically FMC is an independent regulator and not authorised to take instructions from the department of consumer affairs, given the sudden rise in future prices of some commodities, belying their fundamentals, the department is concerned about its impact on retail prices.
“There is suspicion of circular trade in some commodities in the future market, which the FMC will be apprised off,” a senior official from the department said.
Last month, FMC had suspended futures trading in guar gum and guar seed, following allegation of cartelisation by traders, leading to a sharp rise in prices.
It directed that all open positions be squared off on the basis of the daily settlement price of March 27.
It also barred traders from taking any fresh positions in guar gum and guar seed. On the NCDEX platform, guar gum and guar seed futures had shot up by almost 500 per cent and 1,000 per cent respectively, in the last year.
A day after the ban, spot market price of guar in the Jodhpur market in Rajasthan, one of the biggest producers, plunged by Rs 1,500 to Rs 25,500 a quintal, traders said.
Again in April, the regulator suspended trading in all lean season soybean seed future contracts to curb volatility. Market participants were barred from taking any fresh position in soybean seed contracts till September.
Officials in the department of consumer affairs said trading in the futures market should not lead to any unusual rise in spot market prices.
“We are concerned about this and will take all necessary actions to stop this,” another official said.
