The Rajasthan Government’s failure to exempt Warehouse Development Regulatory Authority-registered warehouses from the stock limit on pulses has created confusion in the futures market.

On June 22, the State government had imposed a limit of 250 tonnes for 45 days on wholesalers and 2.5 tonnes on retailers to curb hoarding and bring down the soaring prices.

Without any mention of exemption to WDRA-registered warehouses, the notification gave traders 15 days to adhere to the new stock limit and said it would be effective from July 7 to November 30.

Chana is currently the only pulse traded on commodity exchange platforms.

Warehouses stock

Last year, quoting a Department of Consumer Affairs order, the commodity market regulator Forward Markets Commission said commodities kept in warehouses registered with WDRA have been exempted from stock holding limits under the Essential Commodity Act, 1955 subject to the condition that these warehouses publish the information of stock available with them on real-time basis.

Anil K Choudhary, Managing Director, National Bulk Handling Corporation, said there is uncertainty whether the goods stored in the WDRA-registered warehouses and marked for delivery on futures exchanges would also be covered under the stock limit.

Speaking to BusinessLine , Samir Shah, Managing Director, NCDEX, said the exchange has written to the Principal Secretary of Rajasthan asking him to acknowledge the exemption given by the Consumer Affairs Ministry to WDRA warehouses from stock limits imposed by the State Government.

“So far, we have not received any response from the Rajasthan government. As far as we are concerned the Central Government Law supersedes State regulations when there are conflicting orders,” he added.

The agriculture-focused commodity futures exchange, NCDEX, has 25 accredited warehouses at Bikaner and Sri Ganganagar, the largest pulses trading hub. Of these warehouses, 15 are registered with WDRA.

Inspection authorities have already finished audits on the remaining 10 warehouses and registration is expected soon.

Abnormal volatility

Amit Gupta, Research Analyst, Kedia Commodity Comtrade, said commodity exchanges have advanced the delivery period in chana, castorseed, coriander and jeera and imposed additional margins on both buy and sell positions due to abnormal volatility.

“This forced out entities trying to squeeze sellers by cornering stocks in the physical markets and simultaneously mounting bullish bets in the futures market,” he added.

comment COMMENT NOW