(a) whether the Government has taken any steps for greater regulation in agri
commodity trading to curtail speculation and control food inflation;
(b) if so, the details thereof;
(c) whether the Government is planning to form a regulatory authority
specifically for monitoring of agri commodity trading; and
(d) if so, the details thereof?
THE MINISTER OF STATE (INDEPENDENT CHARGE) FOR CONSUMER AFFAIRS, FOOD AND
PUBLIC DISTRIBUTION (PROF. K. V. THOMAS)
(a) & (b): The Forward Markets Commission (FMC) the regulator for Commodity
Futures Markets under the provisions of the Forward Contracts (Regulation) Act,
1952 uses several regulatory tools in order to ensure that the futures markets
are not subjected to over-speculation and to ensure achievement of the intended
purpose of price risk management and price discovery. FMC keeps a close watch
on the price trends of all the commodities traded on the commodity futures
exchanges and takes measures such as imposition of special margins, additional
margins, increasing initial margin, pre-expiry margin and change in position
limits etc. to intervene in the market as required. Recently, FMC has taken a
number of measures to check excessive speculation that impacts price volatility.
Some of these measures are introduction of staggered delivery system, disallowing
contracts in the lean season, reduction of Final Expiry Date (FED) of some
commodities, scrutiny of volume to open interest ratio, public disclosure of
more trade related information and doubling of initial margin of seven food
items. In so far as the food inflation due to the commodity futures trading is
concerned, an Expert Committee chaired by Shri Abhijit Sen, Member of the
Planning Commission that analyzed annual trend growth rate in prices of sensitive
commodities (food grains and sugar) in pre-futures and post futures period,
concluded that although inflation clearly increased post-futures in some sensitive
commodities that have higher weight in consumer price indices, it is not possible
to make any general claim that inflation accelerated more in commodities with
futures trading.
Other factors particularly demand supply mismatches, degree of dependence on
imports and international prices in these commodities etc. also tend to affect
commodity prices.
(c): No, Madam.
(d): Does not arise in view of (c) above.