Conditions apply

Futures trade in farm commodities won't work with controls

The demand from various organisations for lifting the nearly year-old ban on futures trading in key agricultural commodities, though well-founded, needs to be weighed cautiously before taking the final call. For, despite its well-acknowledged virtues, futures trading has little chance to perform to its potential in India because of excessive government intervention in commodity marketing and the lack of stable domestic and external trade policies. The market regulator, the Securities and Exchange Board of India, has barred futures contracts for several farm products, including some edible oils and oilseeds, pulses, wheat, and non-Basmati rice, to keep their prices within check.