Central Gov. trying to hide their incompetency to curb inflation

[dusukochadu]

https://economictimes.indiatimes.com/markets/commodities/news/sebi-suspends-fo-trading-in-select-agri-commodities-until-next-dec/articleshow/88398025.cms

Sebi suspends trading in 7 agri commodities

Mumbai: The Securities and Exchange Board of India (Sebi) has suspended futures and options trading in agricultural commodities such as wheat, moong dal, and soya bean until next December in a bid to rein in prices.

The suspension, which came into effect on Monday, allows squaring up of existing positions in seven agri and food commodities but no fresh futures trading is permitted in them for a year. This also means that commodities brokers will now be left to trade mainly in metal and  energy contracts.

The finance ministry, in a communication to the Sebi chairman on December 19, had directed the regulator to suspend futures trading in the seven commodities. The move comes amid concerns about high food prices, which are at the heart of the country’s elevated inflation.

“Since inflationary concerns have been building in the economy, the government intends to balance its approach towards consumer inflation, keeping in mind economic growth aspects too,” said Naveen Mathur, director, comm ..
 

Prices have eased recently due to actions by the government, including cuts in import duty, he said. Increased production of oilseeds in India and elsewhere has also helped prices cool.

Following the Sebi directive, the country’s leading commodities exchanges MCX and NCDEX told members they have suspended fresh positions on the seven products, including crude palm oil and non-basmati paddy.

Sebi had already suspended futures trading on chana and mustard seeds. Monday’s order extends the ban on them till next December.

“No new contract shall be launched till further orders,” Sebi said in a release.

The Reserve Bank of India (RBI) has projected consumer inflation at 5.3% for the current fiscal year. In the first half of the next fiscal, it’s pegged at 5%, a percentage point above the target of 4%, although a band of two percentage points on either side is allowed. Central banks around the world are focused on inflation with the US Federal Reserve chairman Jerome Powell planning to accelerate the tapering of bond purchases and raise interest rates to keep prices in check.

“The (Indian) government feels that commodity derivatives are leading to high food prices and hence the move to suspend futures trading in agri-products,” said a commodity exchange official.

The existing futures contracts are a good indicator of the actual demand and supply situation in these commodities and hence the move by Sebi, said market participants.
 

 

 

 

 

 

 

 

Read more at:
https://economictimes.indiatimes.com/markets/commodities/news/sebi-suspends-fo-trading-in-select-agri-commodities-until-next-dec/articleshow/88398025.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

[dusukochadu]

This move is nothing but an attempt by the central gov. to hide the raising prices (due to inflation) of essential commodities from public domain and opposition parties so that they cannot use this as an argument in the upcoming state elections. 

Spineless