Futures trading in tur, urad banned

24 January 2007

Chennai: The Central government has banned futures trading in tur and urad until further notice. An NCDEX official said the exchange received the notice late in the evening asking it to stop trading in forward contracts of urad and tur with immediate effect. He said the current open positions would be settled at today's prices.

Urad for February delivery closed at Rs3,245 a quintal on NCDEX. However, tur ended on a negative note on profit booking at Rs2,476 a quintal for February. The commodity ruled at Rs2,240 on January 12.

Commodity exchange sources attributed the Centre's move as one to curb inflation that rose to 6.12 per cent for the week ended January 6.

The Centre has been under pressure from the Left parties to ban forward trading. The Left allies of the UPA Government have blamed forward trading solely for the rise in prices of essential commodities.

Market players, on the other hand, say that the spurt is in view of tight supplies and rising consumption.

Commodity exchanges heads and analysts believe the Government should take long-term measures to improve farm productivity rather than blame futures trading for the inflation spike.