By IANS,
Mumbai : Futures trading in sugar is set to resume Monday after the government’s ban for 19 months, with the Forward Markets Commission (FCC) regulator giving its formal nod to commodity exchanges.
The permission was given after a strong outlook for production during this sugar year, which started Oct 1, estimated at 25.5 million tonnes by the industry and 24.5 million tonnes by the government.
This was against estimated production of 19 million tonnes the previous year. India is the second largest producer of sugar and its largest consumer.
India had banned futures trading in sugar in May 1999 for six months due to a sharp fall in output and the resultant spike in prices. The government kept extending the order till September, when it allowed its directive to lapse.
The FCC lifted the ban Oct 1, but gave its formal nod for re-start of trading from Dec 27.
“Yes, the commodity exchanges have been given permission to re-start sugar futures from Monday,” FCC chairman B.C. Khatua said here.
Permission has been given for six contracts from January to June.
Futures contracts allow speculators, actual users as also sellers to enter into advance agreements to but or sell commodities for deliveries at a later, pre-determined date.