NEW DELHI, May 7: Trade in agri commodities was around Rs 22 lakh crore last fiscal and was 12.12 per cent of the total trade in all the commodity exchanges in the country, Parliament was informed today.
In a written reply to the Rajya Sabha, Food Minister K V Thomas said the total volume of farm items traded in the 2011- 12 fiscal was 4,942.09 lakh tonnes, which was 35.23 per cent of the volume of all commodities traded at the exchanges.
“The percentage share of agricultural commodities traded in futures market in all the national and regional exchanges was 35.23 per cent of the total volume and 12.12 per cent of the total value of trade in the year 2011-12,” Thomas said.
Presently, 27 agri commodities are actively traded in futures commodity markets, he added.
On the issue of rising prices of some commodities, the minister attributed it to demand-supply mismatch.
“It is observed that some of the agricultural commodities have exhibited considerable prise rise during the past 2 years, April 2010 to March 2012, such as chana, guar gum, guar seed, potato, rapeseed, mustard seed and mentha oil basically due to demand supply mismatch,” Thomas said.
To another query on relation between price rise and futures trading, the minister said that futures trading gives only advance and aggregated information of the likely price scenario of a particular commodity at future date.
Thomas, quoting from the Reserve Bank of India’s annual report (2009-10), said “…Commodity prices in India seem to be influenced more by other drivers of price changes, particularly demand-supply gap in specific commodities, the degree of dependence on imports and international price movements in these commodities.”
To a separate query, the minister said that government is not considering to ban futures trading in any agricultural commodity, as futures trading is a mechanism for price discovery and price risk management.
In another query, Thomas said the commodity market regulator Forward Markets Commission (FMC) has found instances of financial irregularities in a national commodity exchange.
Without naming the exchange, he said “FMC, the regulator of futures market under the provisions of the Forward Contracts (Regulation) Act, 1952 has conducted investigations into complaints received in a national exchange and has found financial irregularities.”
Thomas added that an inquiry into a complaint on tax evasion is also underway.
On the issue of the action taken by the government, he said that they have received a report on the malpractices and the subsequent investigation.
“…However the matter is sub-judice as the alleged individual has moved the court,” Thomas added. (PTI)
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