Commodity Online
MUMBAI: Concerned over the disparity in potato futures prices and spot prices, the market regulator Forward Markets Commission (FMC) had asked MCX and NCDEX to look into the matter. The FMC wanted to check out whether over-speculation in these commodities had led to soaring prices.

However, FMC has also said that the difference in the prices will go soon.

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FMC was concerned about a 15% discrepancy between spot and futures prices in potato. The futures of sugar, turmeric and rubber are simply reflecting the spot market fundamentals and the skew between spot and futures of potato was not as much in the other commodities.

On Wednesday, the difference between spot and futures (April contract) prices on MCX was 3.9%, while on NCDEX it was around 9% (the contract expires on April 20 as against April 15 on MCX). However, the spot-futures differential was 24% on both exchanges for the May contract.

FMC attributed the rise in potato prices to a 5 mt shortage in the current year crop (estimated at 25 mt) compared with the previous year’s crop of over 30 mt which saw prices crash and farmers reducing acreage area. The commodity was banned from futures trading in May last year following a rise in inflationary expectations in the economy.