Commodity Online
NEW DELHI: Will there be further ban on futures trading in agri-commodities? Even as Finance Minister P Chidambaram had categorically ruled out any further ban on commodity futures, a Parliamentary Standing Committee report has suggested that futures in agri-commodities should be banned to curb speculation.

Chidambaram had said that an expert committee headed by Abhijit Sen had pointed out that there was no causal linkage between price rise and futures trading. However, the government had banned eight commodities which could be construed as a politically or economically wise decision.

However, regarding oil prices, the Finance Minister was sure that it was due to speculation in global commodity futures exchanges.

The Parliamentary Committee has opined that farmers should be made aware of futures trading so that they know the prices of their commodities in advance and plan their production.

India in May this year suspended futures trading in four agriculture commodities - soyoil, chana, rubber and potato - for four months because of their alleged role in raising inflation.

Futures trading in rice, wheat, urad and tur was also banned in early 2007 for the same reason.

"The committee also recommends that the government expedite setting up of a regulatory authority of forward market trading on the lines of Sebi," the committee on agriculture headed by Ram Gopal Yadav, member of parliament, said in its report.

A bill giving autonomy to the Forward Markets Commission, which regulates commodity futures trade in India, is pending approval in Parliament.

Commodity analysts said that the Parliamentary Committee report is sure to once again ignite the debate on the link between futures trading and inflation which is most often biased against futures