NCDEX blames supply woes for inflation

NCDEX blames supply woes for inflation
PTI
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First Published: Mon, Feb 19 2007. 12 34 AM IST
Updated: Mon, Feb 19 2007. 12 34 AM IST
Mumbai: Critical of the attack on forward trading by various political parties, the National Commodity and Derivatives Exchange (NCDEX) said high inflation and surging prices of agri-products was due to supply side constraints, and not because of trading on the exchanges.
“It is purely a supply side problem and forward trading has no way aggravated inflation,” NCDEX chief executive officer P.H. Ravikumar said, adding that on the contrary, the prices of agri-products traded in forward market have increased as much as those which are not.
In fact, falling production of various commodities was a matter of concern and the coming Union budget was widely expected to addressthe issue to find a solution in medium term, he said, suggesting the launching ofcontract farming in some African countries as a long-term solution to overcome shortage in edible-oil, food grain, pulses and otheragri-products.
The climatic conditions in Africa are similar to that of South India and practically all agri-products grown here can be replicated there, he said.
Reeling out statistics, Ravikumar said, “I can write a report on inflation that forward trading has not contributed to the surging prices, which is due to low productivity and inadequate supply. Next year, the situation will be worst.”
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First Published: Mon, Feb 19 2007. 12 34 AM IST
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