Date:08/07/2006 URL: http://www.thehindu.com/2006/07/08/stories/2006070803431600.htm

Business

Govt. measures to contain prices

Special Correspondent

Margin money for wheat futures trading increased

NEW DELHI: The Centre is formulating guidelines for futures trading by bulk handlers such as the Food Corporation of India, to bring down prices of essential commodities besides importing pulses and wheat.

At the same time, the government has increased the margin (deposit) money in futures markets for trading in wheat from 5-5.3 per cent to 10 per cent.

An additional margin of 10 per cent has been imposed on the buyer, reducing the price advantage.

Limits on open positions have also been reduced by 50 per cent to 10,000 tonnes for members and 2,000 tonnes for clients spacing out the release of the commodity, according to an official spokesperson.

In addition, the National Agricultural Cooperative Marketing Federation (NAFED) of India has placed orders for import of 5,000 tonnes each of pigeon pea, black matpe (kali urad), and green moong at Mumbai, Chennai and Kolkota ports. Another 25,000 quintals of urad and 5,000 tonnes of tur had been contracted for delivery between July and August.

Projects and Equipment Corporation has invited bids for 81,000 tonnes of urad, moong, tur and chana dal for delivery between July and August at Mumbai, Chennai and Kolkata ports. The bids would be opened on July 11. MMTC Ltd. is also floating global tenders for import of pulses. Pulses production is 13.92 million tonnes this year as against 13.13 million tonnes in 2004-05 and 14.90 million tonnes in 2003-04.

The spokesperson said the increase in the price of sugar was due to shortage of seven lakh tonnes of sugar in Pakistan and 10 lakh tonnes in Bangladesh pushing demand for export of sugar. High international prices were another reason.

To control sugar prices the Director-General of Foreign Trade, under the Ministry of Commerce, has banned export of white sugar. Recently, refined sugar import was allowed at zero duty.

The Food Ministry has made additional quota releases for free sale and made it mandatory for mill owners to sell their quota within the month or else it would be converted into levy sugar.