Margins on guar, chilli futures hiked

The Forward Markets Commission has increased margins on guar seed, guar gum and chilli futures from the start of trade Friday, the National Commodity and Derivatives Exchange said in a release late Tuesday.

The minimum initial margin on chilli has been revised to 21.5 per cent from 13.72 per cent. For guar gum and guar seed, the initial margin has been increased to 17 per cent from 7 per cent, the exchange said.

Accordingly, total margin on chilli has gone up to 30 per cent from 22.22 per cent, while for guar it has doubled to 20 per cent, the circular said.

The decision follows requests by guar trade bodies and chilli traders, who alleged that excessive speculation in futures trading had increased prices of these commodities, making them uncompetitive in the global markets.

On Sunday, Gujarat Guar Gum Manufacturers' Association had said that 19 out of 22 guar gum mills were closed down due to higher guar seed prices.

The association also urged FMC Chairman S Sundaresh to tighten regulation in guar and to reduce daily price limits to 1 per cent from 6 per cent currently.

In fact, the commerce ministry had requested the market regulator to ban futures trade in guar seed and guar gum, which was ruled out by FMC.

Similar complaints of manipulation in chilli contracts have been doing rounds in the past few months.