Commodity market regulator Forward Markets Commission (FMC) has imposed fresh curbs on agriculture commodity futures trading to curb price rise. The regulator has been hiking margins on almost all agriculture commodities to discourage speculation.

Traders expect the FMC to take a series of measures to cool down prices before resorting to suspension of a particular commodity.

Trading in guarseed futures was suspended in March as prices surged relentlessly even after the margin money to be paid for buying a contract was increased to 60 per cent.

On Tuesday, FMC said it has doubled the special margin in potato, soyabean, soyameal and turmeric contracts. A fresh margin of five per cent has been introduced in the sell contracts of potato. Despite several regulatory measures, the spot and futures prices of potato has been going up consistently since March, said the FMC. Fresh positions in the potato contracts will not be allowed during the staggered delivery period of 15 days.

The pre-expiry margin in cardamom and turmeric has been raised to five per cent from three per cent. The margin on both the commodities will now be in force for seven days prior to contract expiry instead of five days earlier. Delivery default margin for cardamom sellers was doubled to six per cent.

Karvy Commodities Assistant General Manager Sushil Sinha said: “FMC action may bring down prices in short term, but the failure of monsoon and expectations of poor kharif crop are leading to price rally.”

suresh.iyengar@thehindu.co.in

(This article was published on August 1, 2012)
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