FMC suspends futures trade in 4 commodities

The Forward Market Commission (FMC), which is the regulator for commodity exchanges in India, decided to suspend futures trading in chana (gram), refined soyoil, potato and rubber for the next four months. "The decision has been taken as a measure of abundant caution considering the concerns of the Government about the inflationary expectations," FMC member Rajeev Agarwal was quoted as saying. All outstanding trades would be settled at Wednesday's closing price. The order may be revoked after September 6 unless the Government thinks otherwise, a financial newspaper reported. India's inflation, based on the wholesale price index (WPI) touched a 42-month peak of 7.61% for the week ended April 26 due to the relentless rise in global commodity prices. The suspension of futures trading in four commodities is the latest in the series of measures taken by the Government to reign in inflation. Last year, the Government had banned futures trading in wheat, rice, urad and tur after allegations that widespread speculation in commodity futures markets was partially responsible for soaring prices of essential food commodities.