Mumbai: India, the world’s second largest buyer of vegetable oils, may resume futures trading in soya bean oil, rubber, potatoes and chickpeas as falling commodity prices reduce pressure on the government to extend a four-month ban.
“We haven’t recommended an extension,” Yashwant Bhave, the top official at the consumer affairs department, which oversees the commodity markets regulator, said in a phone interview from New Delhi. The ban is scheduled to end on Saturday, according to National Commodity and Derivatives Exchange Ltd.
Prime Minister Manmohan Singh’s Congress party imposed the ban in an attempt to rein in inflation before nationwide elections due in May. A slump in crude oil has paced declines in prices of staples including wheat, rice and soya beans, making essential foods more affordable for India’s 1.2 billion people.
“The decline in oil prices may help control inflation,” Kishore Narne, head of research at Anand Rathi Commodities Ltd, said in Mumbai. “The government may allow the order to lapse.”
Inflation unexpectedly declined for a second week in the seven days to 23 August, government figures showed on Thursday. Prices rose 12.34%, easing from a peak of 12.63%in the week ending 9 August.
Crude oil has declined 27% from its record price in July and wheat is down 44% from its peak in February. Rice has tumbled 24% from its all-time high in April and soya beans are 26% below their July peak.
The Congress party-led coalition has banned exports of rice, corn, wheat and cooking oils to tame inflation that reached a 16-year high in August.