Commodity market regulator Forward Markets Commission (FMC) today said it will review the ban on trading in sugar futures in October when the new season starts.
"We will review the ban on sugar futures at the start of the 2010-11 sugar season in October," FMC Chairman B C Khatua told reporters on the sidelines of a function organised by industry chamber Assocham.
The government had banned sugar futures for seven months in May 2009. Later, the ban was extended further till September 2010.
"A decision on resuming trade on sugar futures will be taken only after assessing the estimated crop size of sugarcane in the 2010-11 season," Khatua said.
He stressed that "sugar futures may re-start only if the crop is good next season and the supply of the commodity is comfortable in the market. "Otherwise, people will start blaming the futures market for the price rise," he said.
Sugar season runs from October to September. Though there is no proof that the futures market is driving the spot prices, many, including the political class, hold an erroneous view, he said. FMC wants to re-introduce sugar in a positive market environment, he added.
He pointed out that post-ban retail prices have gone up sharply to the present rate of to Rs 44/kg from Rs 29/kg in May last year when the ban was imposed.
