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Due to the issues raised by small investors and some members of Parliament (MP)s over the irregularities in the guar gum and guar seed trade, India government has asked the commodity market regulator,Forward Market Co..

28 Mar 2012

MUMBAI (Commodity Online): Due to the issues raised by small investors and some members of Parliament (MP)s over the irregularities in the guar gum and guar seed trade, India government has asked the commodity market regulator,Forward Market Commission (FMC) to re-investigate the issues regarding guar futures.

Presently, the trade over the guar complexes has been suspended due to sudden prices rice in the commodity. Guar gum and guar seed futures prices rose 10 fold during the last year.

In the earlier investigation conducted by the FMC, irregularities were found but measures taken by FMC and exchanges failed to stem the rise in prices

Meanwhile, according to traders, decline in production in the major growing areas in India and high export demand as the is the major reason for the rise in price.

Guar gum is used by oil drilling companies for hydraulic fracturing and increased drilling and exploration activity has boosted the demand for guar in global markets.

Meanwhile, earlier FMC had raised the margin of guar complexes to control the price rises but did not work and later on the Commission suspended most of the futures contracts from trading.

According to K.V. Thomas, Food and Consumer Affairs Minister, the issues raised by trade bodies such as ASSOCHAM and some of the MP's will be examined thoroughly and necessary actions will taken on the issue.


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COMMENTS (1)
Gautam Bothra
28 Mar 2012
Too little too late to ban future trading in Gaur Gum, damage is already done to market of Gaur Gum by not taking action timely by FMC. On 1st DEC 2011 Gaur Gaum was quoted at 16500 per qtl and by 20th March 2012 it reached 98000 per qtl, Prices increased by 600 % in just 4 months, and FMC pertained that there was not wrong in price movement,where was the FMC in this period? sleeping? Sleeping with whom needs to be investigated. Same thing is happing in Mentha Oil and Cardamom, and I can see THE FMC still sleeping. Menta Oil was 1323 on 1st Dec 2011 and already touched high of 2564 in just 4 months isnít great ? Cardamom was 601 on 1st Dec 2011 and already touched high of 1312 in just 4 months isnít great ? And the Agency still sleeping or watching to get prices out of roof ?
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