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Potato futures slide on fears of further action by FMC

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Potato futures have dropped on concerns the Forward Markets Commission may act again to curb a rise in prices.
Potato futures have dropped on concerns the Forward Markets Commission may act again to curb a rise in prices.

Potato futures dropped by the maximum permitted level on Friday on ongoing fears that the Forward Markets Commission, the commodity markets regulator, could take further steps to curb a rise in prices.

The FMC has banned the launch of new Tarkeshwar potato contracts. Also effective August 1, no fresh positions are allowed during the staggered delivery period in all running contracts of potato on the MCX and NCDEX. Only squaring-off of existing positions is allowed, the FMC said.

September contracts on the NCDEX slid four per cent to Rs 1,216.7 a quintal.

Around 200-220 lakh tonnes of potato have been stored in different cold storages during the current season. Although 27-30 per cent of the cold storage stocks have been released so far from the producing belts, it is lower than the normal amount of 35-38 per cent released every year.

According to the NHRDF, sowing in Karnataka and Maharashtra has been completed but the area sown has been affected by lower and delayed rain. The kharif acreage for the tuber is expected to be lesser than or maybe the same as that last year thanks to the delayed planting. However, much depends on how the monsoon fares in the coming days.

Analysts expect potato futures to remain sideways as traders are adopting a wait-and-watch policy, expecting the Government to take some measures to curb prices. The upcoming festive season might provide some support to prices. Spot potato prices in Agra were quoted at Rs 1,183.5 a quintal.

(This article was published on August 10, 2012)
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Comments:

It is sad that non-professionals are elected or selected to ruin
rather than run our economy. Mamata and Abhishek of FMC are on the
same page in destroying potato market and the livelihood of the
farmers. Didi has banned export of potato out of West Bengal, thus,
carving out a country within a country for populist political goal of
appeasing consumers. She is not interested in creating a "national"
market for commodities in the interest of farmers. Ramesh Abhishek of
FMC has banned futures trading in Tarkeshwar potato to appease Mamata.
It is immaterial what would be the cumulative effect of ban on export
and futures trading on the potato farmers. Abhishek does not want
Mamata didi to stall the FCRA Bill once again. He considers it
expedient even to chop off the provisions introduced to reform and
develop the market and retain draconian provision against market
participants, so long as he can run the commodity empire in an
autonomous manner.

from:  Vinay Shah
Posted on: Aug 10, 2012 at 16:47 IST
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