Business Daily from THE HINDU group of publications
Tuesday, Aug 29, 2006
Business Daily from THE HINDU group of publications Tuesday, Aug 29, 2006 |
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Agri-Biz & Commodities
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Pulses `Futures market has no role in pulses price volatility' Our Bureau
Kolkata , Aug. 28 The Forward Markets Commission Chairman, Mr S. Sundareshan, has denied the role of futures trading in jacking up prices of pulses.
Other plans
The commission plans to launch an empirical study to find out whether farmers have benefited due to better price discovery on the futures markets. Addressing a conference on "Opportunities in booming commodities market" organised by Assocham here on Monday, the FMC chief said much of the allegations against futures markets referring to price volatility in pulses were unfounded. "The retail price of pulses is ruling 50 to 100 per cent higher than the wholesale or spot market prices, which clearly points that something is wrong with the distribution system which is eating away most of the proceeds," Mr Sundareshan said.
Spot market
According to him, though there is no credible spot market in the country, there is increasing evidence that farmers are using futures market prices as a tool to take the decisions. Accordingly, the production area under pulses had witnessed a significant rise. "Forward markets have understandably helped farmers to earn a little bit extra. This should not be curbed," he said.
Validating argument
To validate its argument, the commission had asked for proposal papers from IIT (Bombay), Institute of Rural Management, Anand, and a number of IIMs for an empirical research on the role of futures markets in helping farmers earn better returns. "The study will be launched shortly," Mr Sundareshan said. Mr Jignesh Shah, Managing Director and CEO of MCX, who was present on the occasion, said creation of a credible spot market on electronic platform would increase the size of commodity markets by four fold. In two years, the commodity futures have grown beyond expectations and the turnover of leading exchanges such as MCX and NCDEX are comparable to the total transactions on the BSE and the NSE.
More Stories on : Pulses | Derivatives Markets | Regulatory Bodies & Rulings
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