MUMBAI: The federal government's move to suspend futures trading in four commodities has failed to soften prices, and the demand-supply mismatch has in fact pushed up prices of some of these commodities, officials and analysts said.
India suspended futures trading in soyoil, rubber, chickpea or chana, and potato for four months with effect from May 8 to rein in soaring inflation. Following the suspension, prices of soyoil and rubber soared, while that of chana and potato have changed little.
Spot price of soyoil in Indore in central Madhya Pradesh has risen more than 4 percent on soaring world markets and high crude oil prices, traders and importers said.
"Retail prices have gone up after suspension and are now completely tracking global markets like CBOT (Chicago Board of Trade) and Malaysian palm," said S K Handa, managing director of Bharat Food Cooperative Ltd, a Gujarat-based edible oil firm.
India, which imports more than 40 percent of its annual vegetable oil requirement, buys palm oil from Malaysia and Indonesia and soyoil from Brazil and Argentina.
Rubber prices also rose in the Kochi spot market in Kerala, a main trading centre. After a fall on the first day post-suspension, rubber prices shot up more than 3.4 percent to Rs 12,000 on Thursday tracking firm global markets and oil.
"It was not the futures trading that took prices higher. It was the international trend and domestic supply situation," said Siby Monippally, member of Rubber Board. However, the other two commodities -- chana and potato -- were not much affected. Prices of chana have risen only about 0.6 percent in the Delhi spot market since last Wednesday.
"Instead of taking short-term measures the government should concentrate on increasing supply," said K C Bhartiya, president of the Pulses Importers' Association of India.
Potato prices had already plunged 28 percent in a little over two months up to May 8 on hopes of excess output. In the last one week, spot prices have further eased 1.78 percent to Rs 441 per 100 kg in Agra.
India suspended futures trading in soyoil, rubber, chickpea or chana, and potato for four months with effect from May 8 to rein in soaring inflation. Following the suspension, prices of soyoil and rubber soared, while that of chana and potato have changed little.
Spot price of soyoil in Indore in central Madhya Pradesh has risen more than 4 percent on soaring world markets and high crude oil prices, traders and importers said.
"Retail prices have gone up after suspension and are now completely tracking global markets like CBOT (Chicago Board of Trade) and Malaysian palm," said S K Handa, managing director of Bharat Food Cooperative Ltd, a Gujarat-based edible oil firm.
India, which imports more than 40 percent of its annual vegetable oil requirement, buys palm oil from Malaysia and Indonesia and soyoil from Brazil and Argentina.
Rubber prices also rose in the Kochi spot market in Kerala, a main trading centre. After a fall on the first day post-suspension, rubber prices shot up more than 3.4 percent to Rs 12,000 on Thursday tracking firm global markets and oil.
"It was not the futures trading that took prices higher. It was the international trend and domestic supply situation," said Siby Monippally, member of Rubber Board. However, the other two commodities -- chana and potato -- were not much affected. Prices of chana have risen only about 0.6 percent in the Delhi spot market since last Wednesday.
"Instead of taking short-term measures the government should concentrate on increasing supply," said K C Bhartiya, president of the Pulses Importers' Association of India.
Potato prices had already plunged 28 percent in a little over two months up to May 8 on hopes of excess output. In the last one week, spot prices have further eased 1.78 percent to Rs 441 per 100 kg in Agra.
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