Govt Bans Futures Trading In Wheat, Rice

Mumbai: India, the world's second largest producer of wheat and rice, has prohibited futures trading in the two commodities to bring down the fastest inflation in two years. Trading will come to an end once existing contracts expire on the nation's three exchanges including the NCDEX, the Forward Markets Commission said. According to the source, the government took this step due to the mounting political pressure to combat inflation. Wheat for March delivery plummeted as much as 1 per cent to Rs 947 per 100 kg on the National Exchange. Contracts for June and July declined 2.8 per cent and 2.4 per cent, respectively. Wheat had gained 26 per cent in the past 10 months, tracking a 35 per cent gain on the Chicago Board of Trade. The value of trades on the 24 commodity bourses touched Rs 27.4 trillion ($619 billion) between April and December, surpassing Rs 21.55 trillion for the year ended March 2006, as economic expansion in China and India, the world's fastest-growing economies, sent metals and energy prices to records. A surge in turnover has raised the pressure to halt trading in food staples, Agriculture Minister Sharad Pawar said on February 21. Of late, the government brought down import duties on cooking oils, steel, aluminum, copper, cement and chemicals such as sulphur, and cut prices of auto fuels. Last week, the government said it will sell 365,000 tonne of wheat at below market prices to cushion consumers from rising food prices.