Business Daily from THE HINDU group of publications
Tuesday, Dec 26, 2006
ePaper
Business Daily from THE HINDU group of publications Tuesday, Dec 26, 2006 ePaper |
|
|
|
|
|
|
|
Agri-Biz & Commodities
-
Commodities Industry & Economy - Exports & Imports Web Extras - Commodity Exchanges Guar gum exporters want futures trading barred G. Srinivasan
New Delhi , Dec. 25 The Commerce Ministry has taken up with the Forward Markets Commission the guar gum industry's plea to ban guarseed and guar gum futures. Official sources told Business Line here that the representatives of the Indian Guar Gum Manufacturers Association recently met the Commerce Secretary, Mr Gopal K. Pillai, to highlight how futures trading of guarseed and guar gum have engendered serious problems to the export of this commodity. They said the country's export of guar gum has witnessed a 12.5 per cent-fold increase between 2000-01 and 2005-06 with India emerging as a major supplier and accounting for 60-65 per cent of world trade for guar gum. Guar gum exports were worth Rs 1,050 crore last year and the current fiscal target is Rs 1,275 crore. India accounts for 80 per cent of the total guar produced in the world and 70 per cent is cultivated in Rajasthan. According to sources in the industry, guar is a price sensitive product with no global benchmark price. As such, guar prices had pierced the roof, fuelled by wild speculation after its inclusion in futures trading. Guar is an agro-based product and guarseed is used only to manufacture guar gum, the bulk of which is exported with the industry reliant on guarseed for its exports. The industry had pleaded with the Forward Market Commission making several representations since 2004 to take measures to stem speculation and high volatility in the market with particular reference to control the open market position. The industry suggested that the open interest of all contracts should not exceed 15 per cent of the average crop of last three years, which is seven lakh tonnes of guarseed.
With the crop this year about 30 per cent higher than last year, there have been no let-up in prices, which seem to be shored up by speculation. While the prices were ruling reasonably well till September 2006, once the new crop arrived from October, the prices have started going up instead of falling. In a span of just 35 days prices have shot up by 12 to 13 per cent with all arrivals being cornered by speculators, the industry said.
As prices of guar in Pakistan is 30 per cent below the Indian price, global buyers are diverting their orders to that country, putting into jeopardy the interests of domestic growers as substantial chunk of export purchase is diverted. It is against this backdrop that the Commerce Secretary, Mr Pillai, has drawn the attention of the FMC Chairman, Mr S. Sundareshan, about the pathetic plight of guar growers.
When contacted, the Minister of State for Commerce, Mr Jairam Ramesh, told Business Line that though futures trading helps real price discovery over the long haul, where it hurts small growers and marginal farmers interests by feeding speculation as in the case of guar, it needs due regulation. He said he would be addressing a round table conference in Jodhpur on December 30 on the present status of India's export vis-à-vis world trade for guar gum, special support/assistance for enhanced export and export target for the 11th Plan period.
More Stories on :
Commodities |
Exports & Imports |
Commodity Exchanges
Article
E-Mail
::
Comment
::
Syndication
::
Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | The Hindu ePaper | Business Line | Business Line ePaper | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2006, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|