A leading official has stated the government may end a 2 year ban on the trading of wheat and rice futures, due to large crops and lower prices that are being predicted this year. It is predicted that the production of wheat this year will exceed last year’s production of 78.4 million tonnes.
Wheat, rice, and two types of lentils were banned in 2007. At the moment, a definite date has not been set for when the ban will be lifted on these grains, but many people are predicting the ban will be lifted in May after the National Elections.
In addition to the grains ban being lifted, tax on overseas sales of basmati rice will also be lifted. Last year other commodities that were banned were chickpea, potato, rubber and soybean oil. These bans were lifted in December, which gives hope that the ban on wheat and rice will also be lifted.
Right now trading volumes at the exchange are being hurt by government bans, with NCDEX conducting 85 to 90 percent of trade in agricultural commodity futures in India. Analysts and traders are hoping the market will improve once government bans, such as the ban on grains, are lifted.
Currently, NCDEX’s trading value is 150.37 billion rupees, which has dropped considerably from a year ago when it was valued at 218.07 billion rupees.