Government constitutes committees to advise FMC

The government has set up an advisory committee to advise the ministry of consumer affairs, public distribution and food and the Forward Markets Commission (FMC) on all commodities, including agri-products.

The committee, consisting primarily of physical market participants such as representatives of farmers, producers, processors, exporters, domain experts and other stakeholders, would advise the ministry and the FMC on ways to better align the physical markets and the futures market so that the farmers and hedgers are benefited from the futures trading.

Such an advisory committee has already been constituted to study various issues in rubber futures trading, the ministry said in a release.

The decision follows the continued rise in prices of certain agricultural commodities, including some essential commodities, in recent months. There have been complaints in some quarters that excessive speculation in futures markets have also contributed to this price rise.

The government has asked FMC to ascertain whether there have been attempts to hoard commodities to influence the futures markets and if so, how this activity is being financed.

Although the Forward Markets Commission is an independent regulator, the chairman, FMC, keeps the government fully informed of all the important developments in the market.