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market | IST

Govt bans futures trading in 7 commodities

Mini

Commodities trading ban: From paddy (non-basmati), wheat, chana, mustard seeds and its derivatives, soya bean and its derivatives, crude palm oil and moong, the Ministry of Finance has notified a ban on trading in futures contracts of seven agricultural commodities for one year to tame inflation.

The government has banned trading in futures contracts of seven agricultural commodities for one year to reign in inflation. These include paddy (non-basmati), wheat, chana, mustard seeds and its derivatives, soya bean and its derivatives, crude palm oil and moong.
The same will be effective immediately, according to a Finance Ministry notification.
India's retail inflation as measured by the Consumer Price Index (CPI) recorded 4.91 percent in the month of November 2021 as compared to 6.93 percent reported in the year-ago period.
Food inflation picked up to 1.87 percent in November from 0.85 percent a month ago with a rise in prices of vegetables. Clothing and footwear inflation was 7.94 percent in November, from 7.39 per cent in October.
Wholesale inflation for November accelerated 14.23 percent from 12.54 percent a month ago. This was the eight consecutive month in which it stayed at a double digit level.
Vegetable inflation along with prices of egg and meat hardened in the month of November.  Inflation in fuel and power basket was higher at 39.81 percent in November. The food index more than doubled to 6.70 percent as compared to 3.06 percent in the previous month.
DK Joshi, senior director and chief economist at CRISIL said, "I am somewhat surprised by the 4.91 percent number. We were expecting a tad above 5 percent. However, this is in line with what the RBI survey was showing. So I think inflation is on track for 5.3 percent average for the year."
Abhishek Upadhyay, senior economist at ICICI Sec PD said, "We were expecting inflation to be much higher at 5.3 percent, so this is a pleasant surprise. It appears that the sequential increase in the vegetable index has been lower than what we anticipated. We had assumed a 12 percent jump and that has come at 7 percent."