Kochi: The ban on futures trading in rubber, potato, chickpea and soya oil lapsed on Sunday, but it will take a few more days before trading actually resumes.
Futures trading in the four commodities was suspended on 6 May to counter a spurt in inflation, which at 7.83% for the week ended 3 May had touched a 44-month high.
New contract: Certain procedures, such as preparing a fresh contract calendar for the commodities (which include potato) for the next three-four months need to be completed before trading can resume. Abhijit Bhatlekar / Mint
Inflation had reached a 16-year high of 12.91% in August but has since easedto 8.84% in the week to 15 November.
The ban, which was initially imposed for four months but later extended through November, was to end on Sunday.
“Technically, since there has been no communication from the government for any further extension (of the ban), it can be deemed that the go-ahead has been given for the trade. We have not received any information otherwise,” said B.C. Khatua, chairman of the Forward Markets Commission, or FMC.
Y. Bhave, secretary in the department of consumer affairs, said there was no decision to extend the suspension. If there was no communication to the contrary, it would mean that trading could resume on 1 December, he said.
However, certain procedures, such as preparing a fresh contract calendar for the commodities for the next three-four months, need to be followed before futures trading in them could actually resume. “Till such a calendar is fixed, trade cannot resume,” Khatua said.
He said FMC will begin work on the calendar this week. The procedure will be put in place after the commission goes through the applications received from the exchanges,he added.
Meanwhile, industry analysts say it will take at least a month for futures trading to resume in the four commodities.
“We have already submitted a calendar for contracts and are yet to receive any word from the FMC,” said Kailash Gupta, managing director of Ahmedabad-based National Multi Commodity Exchange (NMCE).
Joseph Masey, managing director of Mumbai-based Multi Commodity Exchange (MCX), said there has been no communication so far from the FMC to resume trading in the four commodities.
Sajen Peter, chairman of the Rubber Board, the government trade promotion body, had written last week to the commerce ministry, demanding that the suspension in rubber futures trading should not be extended.
Peter said that contrary to claims at the time of suspension, rubber prices had crossed Rs140 a kg from Rs115-120 when trading was halted and had remained steady till a few weeks ago.
It only went to show that the suspension had little impact and prices were determined by demand and supply.
The recent fall in prices to Rs62-65 levels has been on account of an economic slowdown and the fall in prices of crude oil whose by-products are used for making synthetic rubber, which is an alternative for natural rubber.