January 25, 2008

India's farm ministry wants return of wheat futures, stands firm on corn exports

Indian Agriculture Minister Sharad Pawar is in favor of lifting a ban on futures trade in wheat and rice and feels that the government should not delay permission for foreign direct investment in commodity exchanges, the Economic Times newspaper reported Friday (January 25, 2008).

"I think it may be time to consider removing the ban on select commodity trading imposed earlier," the paper quoted Pawar as saying. He added that he is keen to see a decision on FDI in commodities markets at the earliest. 

Pawar's statement assumes significance at a time when a panel is expected to submit its report on the impact of futures trading on prices of essential commodities.

India banned futures trade in wheat, rice and some pulses last year to check a rise in open market prices.

Meanwhile, Pawar's continued support of India's corn exports is drawing heat from poultry producers and other corn users.  

Peeved over his stance that the government is not in favor of banning corn exports despite a rise in prices, India's corn consuming industries are planning to approach the government demanding regulation of exports, the Business Standard newspaper reported Friday.

"If prices go higher and availability becomes scarce, exports would have to be brought under control," the paper said, quoting Amol Seth, president of the All India Starch Manufacturers Association.

Recently, Pawar told reporters that the government was not in favor of banning corn exports, as it will hurt the interests of growers.