FMC may review open limits

The Forward Markets Commission (FMC) is awaiting suggestions from stakeholders of commodities trade for liberalising open position limit in selected commodities.

"We have received requests from trade bodies and asked them to come up with specific issues they faced in the post-limit trade era. If they come up with realistic data then probably, FMC would consider commoditywise relaxation," FMC member Kewal Ram told Business Standard on Tuesday.

The demands pouring in are very general in nature and the FMC has asked industry bodies to prove those in specific commodities.

Effective September 1, commodity bourses, under the directive of the Forward Market Commission (FMC), had levied a ceiling on trade in more than 100 commodities and, subsequently, relaxed them partially later. The ceiling was meant for preventing price rigging through excessive speculation.

The move was condemned by speculators as it restricted their operations.

The position limit for members and clients in sensitive commodities such as chana, guar gum, guar seed, and jeera has been capped at 30,000 (10,000) tonne, 3,000 (1,000) tonne, 9,000 (3,000) tonne, and 600 (200) tonne respectively, while that for nearby month it is just one tenth of all commodities.

"On earlier occasions, we have witnessed that traders ask for relaxations without sufficient sufferings. In some cases, even open position limits were not hit still they sought for relaxations. FMC would consider all possible aspects for smooth trade on platform," Ram added.

The FMC is open to any suggestions. Depending upon the merits of each cases, it is ready to consider the relaxation provided sufficient reasons have been brought forward, Ram further said.

Meanwhile, the FMC has engaged IIM-Bangalore to conduct study on how much farmers actually gained from the commencement of organised commodity futures market. The study would be conducted on sensitive commodities including sugar and wheat.

The study has been commissioned in the wake of allegations that farmers community had not gained anything with the recent escalation in prices such as wheat. The regulator, however, denied any excessive speculation in wheat.

At a CEO conclave on Monday, L Mansingh, secretary, Department of Consumer Affairs, said adequate wheat would be supplied to consumers and, hence, the question of unhealthy speculation in wheat did not arise.