News

May 07, 2008

India May Ban Futures Trading In Agricultural Commodities

By TC Malhotra in New Delhi

India's leading commodity exchanges, the National Commodity and Derivatives Exchange (NCDEX), the National Multi-Commodity Exchange of India (NMCE) and the Multi Commodity Exchange (MCX), have been hit fairly hard by the news that the federal government may ban futures trading in agricultural commodities. All the three exchanges have witnessed a sharp decline in the daily trading volumes in terms of value.

For several months now India has been attempting to face up to the relentless increases in global commodity prices, especially as regards food and petroleum products, over which the government does not have much control. In an attempt to put the lid back on inflation and after growing pressure from certain traders and political parties, the federal government is considering banning futures trading in these commodities. 

While rice, wheat, and pulses (urad and tur) are already excluded...