The Government had set up an Expert Committee in 2007 under the Chairmanship of Prof Abhijit Sen, Member Planning Commission to study whether and to what extent futures trading has contributed to price rise in agricultural commodities, the Lok Sabha was informed.

Minister of State for Agriculture and Consumer Affairs K V Thomas in a written reply said the Expert Committee submitted its report in 2008 and stated that ‘ Given these conflicting results from daily as against weekly and monthly data, no strong conclusion can be drawn on whether introduction of futures trade is associated with decrease or increase in spot price volatility’.

The Expert committee also analysed annual growth rate in prices of sensitive commodities (food grains and sugar) in pre-future period and post future period and concluded that although inflation clearly increased post futures in some sensitive commodities that have higher weight in consumer price indices, it is not possible to make any general claim that inflation accelerated more in commodities with futures trading.

Prof Thomas said contract designs are approved by the Regulator, Forward Market Commission (FMC). It is stated by FMC that almost all Agricultural commodities traded in the futures market are on compulsory delivery settlement mode, he added.

UNI