The six-month ban on futures trading in guar seed and gum might get lifted in the near future, as prices of the commodity have fallen significantly in this period, with the euphoria driving the prices seemingly tapering.
The futures market regulator, the Forward Markets Commission (FMC), has sought views on the issue from a newly formed advisory committee. The panel of 45 members representing exchanges, farmers, commodity experts and other stakeholders, was formed last week. FMC has called its first meeting on October 16.
The price of guar gum reached Rs 100,000 a tonne in March; it is now about Rs 24,000 a tonne. Guar seed has fallen to Rs 8,000 a tonne from Rs 30,000 a tonne.
Reports also suggest that guar gum export might be lower than earlier expectations and the seed crop higher on an increase in sowing. These are expected to help keep prices under control.
Jignesh Shah of MCX, Uday Kotak, Narendra Murkumbi of Shri Renuka Sugar, Kailash Sahara of the Indore-based National Board of Trade, representatives from the Securities and Exchange Board of India, the warehousing regulator, Hafed, Nafed, Iffco, Glencore India’s Pravin Dongre, ITC and IIM-Bangalore professor Vijay Saldanha, and former FMC member Keval Ram are on the committee.
Apart from the issue of resuming futures in guar, the October 16 meeting is to discuss the allowing of market making in illiquid contracts, trading in narrow commodities and formation of a committee for advising on contract specifications.
While the recommendations will be advisory, not binding, it will be useful for FMC to get direct feedback from the stakeholders on various issues.
