To lift or not to lift ban on futures deal

NEW DELHI: The prospect of kharif crops and ensuing price situation would bring into limelight the government���s decision to lift the ban on futures trading in a host of farm products when it is taken up for review shortly.

The government had banned futures trading of potato, rubber, gram (chana) and soyaoil in May 2008 for four months. The stipulated period of the ban will end on September 6.

These commodities were added to a list of four other products amid allegations from political parties that futures trading was leading to price rise. Futures trading on rice, wheat, tur and urad was prohibited in early 2007.

���We will review the ban on future trading later this month. We will look into the crop prospects in the kharif season and delve on the likely price-trend over the next few months,��� a senior government official said. He added that there is no proposal to ban any other commodity.

When asked about the possibility of extending the ban on the four items beyond the decided four months, the agriculture minister, Sharad Pawar, said in June during his visit to Rome: ���Let���s see what happens...I think that the decision was taken for four months only. I do hope time will not come to extend the period.���

Mr Pawar noted that the Abhijit Sen Committee Report members overwhelmingly said there was no proof that forward trading was responsible for rising prices. The committee, which was headed by planning commission member Abhijit Sen, was formed in 2007 to study the impact of futures trading on the prices of essential commodities.

Analysts point out that since the left parties, which were vocal against futures trading, are out of the ruling coalition, the government may not face any difficulty in revoking the ban.