Possible Ban on Mustard Seed Futures in India

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The government of India is examining a proposal to ban futures trading in mustard seed and chana (chickpea) due to sharp increase in prices. A senior consumer affairs ministry official said, “We are monitoring the price movements of these two items that have risen sharply in the past few months.”

Mustard seed and chana (chickpea) are largely traded on the leading agricultural commodity exchange, the National Commodity & Derivatives Exchange (NCDEX). According to NCDEX data, chana (chickpea) prices had risen 67 per cent to Rs 3,989 ($77.73, €58.57, £48.95) a quintal as on March 28 in the April contract of this year, as against Rs 2,382 ($46.41, €34.97, £29.23) a quintal in the same period of the April contract last year. Similarly, prices of mustard seed in the April contract of 2012 increased 44 per cent to Rs 3,808 ($74.20, €55.91, £46.73) a quintal from Rs 2,646 ($51.56, €38.85, £32.47) a quintal in the April 2011 contract.

However, analysts are of the view that unlike guar gum and guar seed, prices of mustard seeds and chana (chickpea) are driven by fundamentals and not speculations.

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