Commodity Online
MUMBAI: Sugar futures in India stand suspended till December 31 on fears that the market could create inflationary pressures on the commodity.

No new sugar contracts will be launched and new contracts for which approval was given by Forward Markets Commission also stands suspended till the end of the year. The Forward Markets Commission (FMC) on Tuesday suspended futures trading in sugar even as the trade was betting.

The suspension of sugar futures comes a week after the two-year ban on wheat futures was lifted and market was agog with talk of resumption of rice futures very soon. Tur and urad, the other banned commodities were also expecting the curse to be lifted soon.
Some analysts pointed out that ban on sugar futures would hurt importers as they lose the platform for hedging their risk.However, sugar futures have been rising in recent times reflecting the ground reality that Indian ouput this season is expect to be much lower than last year.

In recent days, sugar futures on NCDEX have been trading firm with a downward bias. Analysts attributed it traders hoped of Government extending duty-free raw sugar imports to next season, which starts in October and ends in September.

The ban of sugar futures and resumption of wheat futures comes at a time when the return of UPA government has raised expectations that more autonomy will be granted to market regulator, FMC by tabling a bill in Parliament to amend the Forward Contract Regulatiions.