FMC consulting Commerce Min on lifting ban on guar future
New Delhi: Commodity markets regulator FMC on Friday said it is in a consultation process with the Commerce Ministry on the issue of lifting ban on guar futures.
In March this year, FMC had banned futures trading in guarseed and guargum, which is largely exported for use in oil and gas industry, to curb price volatility and speculation.
Last month, the matter was discussed at the meeting of the government-constituted Advisory Committee, which suggested relaunch of the guar futures.
"The Advisory Committee has proposed relaunch of guar futures but we have not yet taken the decision. We are consulting with the Directorate General of foreign Trade (DGFT)," Forward Markets Commission (FMC) Chairman Ramesh Abhishek told PTI.
Guar exporters have expressed their concern with the DGFT, an agency that promotes and facilitates trade under the Commerce Ministry, he added.
However, the regulator said it was "not in a hurry" to take decision on guar futures as its priority was to ensure transparent platform for price discovery and hedging.
Leading agri-commodity bourse NCDEX has also sought FMC to give permission to re-list guar gum and guar seed futures.
"Guar gum exporters, who were hedging on the exchange platform, are affected due to the ban. Prior to ban, prices rose due to doubling of export following a rise in demand and not due to speculation," an analyst said.
In June, when sowing of guar seed had begun, spot prices were ruling at Rs 6,000 per quintal. Now, the rates have touched Rs 8,000 per quintal, he said.
Traders and analysts are of the opinion that the time is apt for regulator to lift the ban on guar futures because the harvesting of guar seed is underway in most growing states including Rajasthan and Gujarat and higher production.
Because of high prices that prevailed last year, domestic production has increased and is expected be double at almost 20 lakh tonnes over the last year, they said.
Guar gum is extracted from guar seed. India is the world's biggest exporter of the commodity. Last year, 4.5 lakh tonnes of guar gum was shipped. To produce one tonne of guar gum, three tonnes of guar seeds is used.
At present, the country has five national and 16 regional level commodity exchanges in the country. Recently, the FMC gave approval to the Universal Commodity Exchange to operate as a national bourse.