Govt scraps ban on wheat future

The government after a long time has finally decided to scrap the ban imposed on the wheat future viewing the stable price and sufficient stock in the government procurement cell.

This decision of the government could be vital at both juncture: politically and economically.

On February 28, 2007, the then finance minister P Chidambaram had imposed the ban on wheat directing that the ban would be in force until a committee set up under Prof Abhijit Sen submitted its report. The government had slapped the ban considering that it would arrest the skyrocketing inflation and buffer stock of wheat can also be endured from this move.

However, the Abhijit Committee had submitted its report last year finding no links between futures trade and rise in the prices of wheat and advocated to lift the ban but the ban was continued viewing the soaring prices of food.

But surprisingly, the ban has been lifted just a day before the election counting begins.

This ban has hit sternly to commodity based stock exchanges, especially NCDEX (National Commodity and Derivatives Exchange) that primarily deals with the agricultural product.

With the latest decision of the government, the NCDEX and other commodities stock exchanges have applied for restarting the future trading in their exchanges.