Last Updated : 28 March 2012 at 14:05 IST
India guar complex irregularities to be reinvestigated by FMC
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.
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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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