Almost all the agriculture commodity futures fell sharply on Thursday after the market regulator Forward Markets Commission warned that it will keep a close watch and ban some of the commodity if it sees some abnormal price movement.
Most agriculture commodities have been rising relentlessly in the future market on the back of lower output in this kharif season.
Turmeric prices tumbled 4 per cent to Rs 6,256 a quintal for the first time in many weeks. Jeera lost 3 per cent at Rs 16,237, chilli was down 2 per cent at Rs 5,824 a quintal, while pepper dipped 1 per cent at Rs 43,590 a quintal. Chana and cocud were down 2 and 3 per cent at Rs 4,618 and Rs 1,580 a quintal.
The fall in turmeric prices may continue as the prices have increased by about 88 per cent in last two months. Demand has slowed down considerably due to the sharp run up in prices. However, poor rainfall in turmeric growing regions of Andhra Pradesh and Tamil Nadu will lead to a fall of 20-30 per cent in output this year. Spot prices in Erode still rules high at Rs 7,000 a quintal.
Keywords: agri futures, FMC warns, forward markets commission, agri commodities, jeera, turmeric, chana, pepper,
Comments:
The main reason why the futures market in agricultural commodities has
not developed is the spineless regulator, who continues to distort the
market forces by its repeated and skewed interventions. Earlier,
Forward Markets Commission had taken an easy route of putting the
agri-commodities under suspension just to please its bosses in Delhi.
Rice, Urad and Tur continue to remain suspended even now. The present
regime at FMC does not want to be seen as lagging behind. It has put
all guarseed contracts under suspension. What is worse than the
suspension is the frequent one-sided interventions by the FMC in the
futures market, whose primary purpose is to provide protection against
price volatility. The FMC wants to show that it is its responsibility
to curb volatility. Market participants will be able to protect
themselves against price volatility if futures market is not distorted
by the FMC through its frequent one-sided interventions. One can only
pray that wisdom will dawn on FMC soon
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