India permits futures trading in grains, pulses, gold
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India permits futures trading in grains, pulses, gold

Friday, 21 February 2003, 08:00 Hrs
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NEW DELHI: In a major move to help traders benefit from futures trading, India has lifted restrictions on 54 more commodities including grains, pulses and gold.

Though the assurance to lift the curbs on all commodities was made in the last budget, the decision comes barely a week before the presentation of the 2003-04 fiscal budget on February 28.

"Government has allowed futures trading in all major commodities by removing the prohibition on 54 commodities under the Forward Contract (Regulation) Act, 1952," ministry of consumer affairs, food and public distribution said in a statement Thursday.

"This is a part of the series of efforts in recent years towards liberalisation of the economy in general and the agricultural sector in particular."

In August 2002, based on the recommendations of several expert groups, India had lifted restrictions on futures trading in 27 items including sugar, several oilseeds, oils and their cake.

The remaining 54 items in the list of 81 are now being freed for futures trading. These include pulses, remaining edible oilseeds and oils, spices and metals.

"Thus major voluminous commodities such as wheat and rice, major pulses, gold and silver are now available for futures trading and in the process the stake holders can use the market-based tools of risk management to hedge their exposure and in discovering future prices," the ministry stated.

"Opening up of food grains and bullion for futures trading can be considered as major milestones."

Including the 54 new commodities, presently there are 94 commodities in the regulated list under Section 15 of the Forward Contract (Regulation) Act, 1952. The act permits futures trading only through recognised commodity exchanges governed by the Forward Market Commission.

With the lifting of curbs, the government has urged the 21 commodity exchanges in the country to submit commodity specific feasibility study for futures trading in the new commodities.

Source: IANS
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