In view of the recent hike in prices of essential commodities, the government on Monday said there is a need to have a relook at futures trading, including in food items.
“Future trade in all items, including food items, is one matter that needs to be discussed in-depth. We need to consult with the State governments as well,” Minister of State for Consumer Affairs, Food and Public Distribution K.V. Thomas said in Rajya Sabha during Question Hour.
He, however, said though there were demands for banning the futures trading, in reality, even after suspension of trading on a couple of commodities, spot prices continued to go up.
“We have to think in all seriousness about the role of futures trade,” Mr. Thomas said, adding there was need to make changes in the Agricultural Produce Marketing Committee Act to keep prices of essential commodities under check.
Attributing the recent hike in prices of vegetables and essential commodities to demand-supply mismatch, increased input costs and changing dietary patterns, he said various steps were taken to contain the prices.
He said in order to contain the prices of essential commodities, import duties on rice, wheat, onion, pulses and edible oils have been brought to nil and for refined oils and vegetable oils, it has been brought down to 7.5 per cent.
The government has also extended the limit for duty-free import of white and raw sugar till June 30 and banned export of edible oils and pulses.
Keywords: futures trading, speculative trading, price rise, essential commodities, commodities trading
Comments that espouse the banning of derivatives spank of ignorance
of the basic theories of Finance. Paper derivatives are not the Same
as Hedging. Unfortunately the ignorant have confused the two and have
labelled the practice of hedging as gaming. Totally stupid. Hedges
were first practiced in the rice trade in Japan about 300 years ago.
Never went wrong, and is still a fundamental tool for the CFO or the
farmer to mitigate volatility and lock in profits. Only an ignorant
person cannot tell the difference.
Thomas is wrong in his claims.The Inflations is high due to two
decisive blunders by the UPA I and II:-
1.From 2009 onwards MASSIVE stimuli are continuing,.As per CAG last
Fiscal,it was Rs 70,000 Crroes.Such massive SUBSIDY to the Oligarchs
will incraese Fiscal Defict,and that is what has happened right from
2008.The value of the Rupee has got HALVED, as compared to that, in
2008.
2.The reported misuse of the National Exchequer by UPA I to the tune
of Rs 2,90,000 Crores,prior to the Lok Sabha elections in 2009.
These two are the main culprits.
3.Derivatives in all their forms should be BANNED,as they will be
misused to bankrupt India and make the life of the POOR,Middle Class
and the Fixed-Income groups.
Please google for:-
The $ 1.5 Quadrillion Derivatives Bomb
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