NCDEX throws weight behind commodity futures trade
Pending the Abhijit Sen panel report on the sensitive issue, the Centre appears to have accepted, albeit tacitly, that the hike in essential commodity prices has little to do with futures trading.
By Prabha Jagannathan, TNN |
NEW DELHI: Pending the Abhijit Sen panel report on the sensitive issue, the Centre appears to have accepted, albeit tacitly, that the hike in essential commodity prices has little to do with futures trading.
This conclusion, drawn from an analysis done by the country���s top agriculture commodities exchange, NCDEX, which compares the increase in the price of commodities both traded and non traded, may have been the reason why the government chose not to ban essential commodity futures trading across the board despite strong pressure to do so from its allies, the Left parties. The analysis could come in handy for the UPA politically, too.
The report, for which price data for traded essential commodities was drawn from the commerce and industry ministry, contends that the annual price (y-o-y , up to March 3, 2008) movement for actively traded commodities actually dipped to 5.17%. Such commodities include mustard seed, soyabean , chana, sugar and maize (with a cumulative weight of 6.65% in the wholesale price index) but exclude inactively traded ones such as masoor, groundnut, groundnut oil and rape and mustard cakes. In contrast, the study found that the annual price change in non-traded essential commodities (including imported edible oil, rice, wheat, gingelly oil, sunflower, cottonseed, copra, jowar, barley , bajra, rice, bran oil, vegetables and arhar or tur), was 9.04%. These commodities have an overall weight of 17.6% in the WPI.
In comparison, price for all traded essential commodities (with a weight of 7.78% in the WPI), registered a hike to 5.84%. The price rise observed in the actively traded essential agriculture commodity complex was found to be in line with the overall level of price inflation of 5.11%. Significantly, a more detailed analysis of the annual price change in actively traded essential commodities that are directly consumed, excluding oilseeds and cakes, (overall weight of 5.31% in the WPI) also registered a fall to 0.67%.
The study has emphasised that after the trading ban was imposed on select commodities , prices for agriculture commodities have risen across the board in the domestic market in line with global commodity price trends.
This conclusion, drawn from an analysis done by the country���s top agriculture commodities exchange, NCDEX, which compares the increase in the price of commodities both traded and non traded, may have been the reason why the government chose not to ban essential commodity futures trading across the board despite strong pressure to do so from its allies, the Left parties. The analysis could come in handy for the UPA politically, too.
The report, for which price data for traded essential commodities was drawn from the commerce and industry ministry, contends that the annual price (y-o-y , up to March 3, 2008) movement for actively traded commodities actually dipped to 5.17%. Such commodities include mustard seed, soyabean , chana, sugar and maize (with a cumulative weight of 6.65% in the wholesale price index) but exclude inactively traded ones such as masoor, groundnut, groundnut oil and rape and mustard cakes. In contrast, the study found that the annual price change in non-traded essential commodities (including imported edible oil, rice, wheat, gingelly oil, sunflower, cottonseed, copra, jowar, barley , bajra, rice, bran oil, vegetables and arhar or tur), was 9.04%. These commodities have an overall weight of 17.6% in the WPI.
In comparison, price for all traded essential commodities (with a weight of 7.78% in the WPI), registered a hike to 5.84%. The price rise observed in the actively traded essential agriculture commodity complex was found to be in line with the overall level of price inflation of 5.11%. Significantly, a more detailed analysis of the annual price change in actively traded essential commodities that are directly consumed, excluding oilseeds and cakes, (overall weight of 5.31% in the WPI) also registered a fall to 0.67%.
The study has emphasised that after the trading ban was imposed on select commodities , prices for agriculture commodities have risen across the board in the domestic market in line with global commodity price trends.
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