Date:19/07/2006 URL: http://www.thehindubusinessline.com/2006/07/19/stories/2006071903180800.htm

Back `No move to ban futures trading'

Our Bureau

New Delhi , July 18

The Union Government on Tuesday asserted that futures trading had helped stabilise the volatility in prices of wheat and other essential commodities and there was no proposal to scrap them from the system.

"There is no question of banning future trading in essential commodities. Future trading has stabilised volatility in prices," the Union Consumers Affairs Secretary, Mr L. Mansingh, told reporters on the sidelines of a FICCI meeting.

Review of price scenario

Earlier in the day, the Committee of Secretaries on Prices headed by Cabinet Secretary, Mr B.K. Chaturvedi, reviewed the price scenario in the country. It will submit its proposals to the Cabinet Committee on Prices. The meeting was attended, among others, by Mr Mansingh and Secretaries of Food, I&B and Commerce Ministries.

In the previous meeting, the details of which were released on Tuesday, the Secretaries observed that spot prices of wheat had declined by 6.3 per cent from Rs 922 a quintal on February 1 to Rs 864 a quintal on July 13. It observed that the fall in the price was due to the decision to import five lakh tonnes of wheat on February 2. The retail price also declined by nine per cent at Delhi to Rs 10 a kg from Rs 11, the official release said.

Spot prices of wheat are likely to soften further on fresh arrivals of the imported wheat, it said, adding that futures prices would depend on the quality and prices of wheat being contracted for import by private traders at five per cent import duty.

However, the retail prices of wheat and sugar have generally remain unchanged during the last ten days, said the release. In wheat, the retail prices have gone down in Bangalore and Lucknow, but have gone up in Bhopal, Mumbai and Bhubaneswar, it added.