India to retain curb on rice exports as well as futures

August 4th, 2008 - 4:09 pm ICT by IANS  


New Delhi, Aug 4 (IANS) The government plans to extend the ban on futures trading in soy oil, rubber, chickpea and potato when it expires next month, and is expected to retain export curbs on non-basmati rice and wheat for at least three months, a top commerce ministry official said here Monday. “Prices of commodities remain a concern. It is unlikely that we will relax the ban on futures trade in these four commodities,” commerce secretary G.K. Pillai told reporters on the sidelines of a conference on World Trade Organisation (WTO) negotiations.

The comment comes close on the heels of India’s failure at the WTO talks in Geneva to convince the developed world, notably the US, that its farmers needed protection.

The government is planning to export about three million tonnes of non-basmati rice to African countries after November, when the export ban period expires.

Currently, export of non-basmati rice is banned to ensure its availability in the domestic market and to keep a check on inflation, which has since come closer to the 12 percent mark.

“Even if the ban is not fully lifted, we may export two to three million tonnes after November to some African countries,” Pillai said.

“A bumper crop of 94 million tonnes of non-basmati rice is expected in November, of which six million tonnes would be surplus,” he added.

Agriculture minister Sharad Pawar July 30 had hinted that the government was unlikely to “ban or discourage” futures trading in food commodities in the country.

“It was a conscious decision of the previous government to have futures trading, and should be strengthened. It is being maintained even in the current regime,” he had said.

Pawar had also said the government would assess if banning futures trading in some commodities had resulted in containing their prices.

“We have time to decide whether the ban should be lifted or not,” he had told reporters on the margins of the 24th annual meeting of Central Consumer Protection Council (CCPC) here.

The Parliamentary Standing Committee on agriculture, headed by Ram Gopal Yadav, has suggested discouraging futures trading, and setting up a regulatory authority for forward market trading on the lines of Securities and Exchange Board of India (Sebi).

In futures trading, there is usually a contract that is essentially an agreement between two parties to buy or sell an underlying asset at a certain time in the future at a certain price.

A futures contract usually has a standardized date and month of delivery, quantity and price.

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