Panic in Chana Fu­tures Af­ter Ban Ru­mours

Cen­tre con­firms propos­ing stock lim­its

The Economic Times - - Commodities Plus -

Ram Sahgal & Mad­hvi Sally

Mum­bai|New Delhi: Panic gripped the chana fu­tures counter on Wed­nes­day af­ter ru­mours sur­faced of a ban on the prod­uct from the fu­tures mar­ket. How­ever, a food min­istry of­fi­cial told ET that it was propos­ing to ask states to im­pose stock lim­its on the pulse to con­trol in­fla­tion. “We are ask­ing states to en­sure pulses prices are stable and sup­plies are steady and see­ing if there is a need to put stock limit,” said a min­istry of­fi­cial. He said the govern­ment has pro­posed to states to con­sider stock lim­its on sugar, with the same aim.

Delhi and Ra­jasthan have im­posed stock lim­its on pulses. The im­pact on the most ac­tive chana con­tract on NCDEX was im­me­di­ate. From a high of .₹ 5,544 a quin­tal (100 kg), the con­tract last traded at .₹ 5,368, down al­most half a per­cent as traders cut out­stand­ing po­si­tions, or open in­ter­est (OI), from 38,910 tonnes on Mon­day to 29,150 tonnes on Wed­nes­day. The fall in OI clearly sig­nalled the panic based on the un­con­firmed ru­mour of a ban. How­ever, mar­ket watch­ers like Kishore Narne, head of com­modi­ties at Moti­lal Oswal Com­modi­ties, feels stock lim­its could be “coun­ter­pro­duc­tive” at times as they sent out sig­nals of a short­age that could en­tice traders hold­ing small quan­ti­ties of stock at times of a short­age to ab­stain from re­leas­ing stock into mar­ket on hopes of higher prices.

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