Measures to control inflation through futures ban

The government, which washes fish during the festive season like Navratri and Diwali due to skyrocketing prices of edible oils and pulses, has put a stop to futures by banning futures to curb the excess of rye-mustard speculation. Currently only a few concessions are given to fix previous deals. Also banned from making new futures. It is disputed in the market that speculative activities have been banned to put a brake on the futures prices of various agricultural commodities running on commodity exchanges as they affect the spot markets.

In order to control the rising food prices, the government has often resorted to cuts in import duties, sometimes bans on exports or turning a blind eye to stockists. But now the government has started closing futures trading, which is the root of speculation. Will closing futures really reduce inflation? The matter with such questioning has become a subject of investigation if and then. Rayda has taken a sudden step to control the market that has been growing steadily for the last six-seven months. Rayda's crop is declining in the country. The boom is being fueled by a lack of supply against growing demand at festivals. In the retail market, Rayda's prices have crossed Rs 150 per liter. It is estimated that the country produced around 3 lakh tonnes during the year 2020-21. It is estimated that more than 3 million tonnes will be planted in the current season as well. At present, farmers are expected to have a stock of 15 to 18 lakh tonnes. Rayda had an average return of 8 to 12 per cent. But in February this year, Raydo, who was hovering around 200, jumped to the 200 level in seven-eight months and got a return of almost 100 per cent. In colder states like Rajasthan, Bengal and Uttar Pradesh, the consumption of Rayda oil is higher. Rayda's production is highest in states like Gujarat, Rajasthan, UP and Haryana. SEBI has ordered the exchanges to take strict action as Rayada oil is considered an essential commodity under the Act.

The government has banned futures trading in agricultural commodities in the past, though SEBI has banned futures for the first time in Rayada. Soybean prices have also doubled in the past but soybeans are a global crop. While Rayado mostly happens only in India. So there is talk that the government has decided to hit the brakes on Rayda’s growing market. Earlier, the government had banned soybean oil for six months in 2008, after which it broke the chickpea futures in 2009, 2013 and 2014. In 2012, the red bubble bounced off the guar futures and the bubble burst for 12 months. Even in the year 2015, castor futures were suddenly stockpiled at midnight, creating an atmosphere of panic which led to measures being taken with the help of Square Off to save the investors who had suffered huge losses. In the year 2016, the break was on black pepper futures. In 2006, sugar was banned, and in 2008, rice, wheat, tur and lentils were banned.

Many Rayda mills have closed due to shortage of goods in front of the booming Rayda market. Parallel to Rayda oil, other edible oils are also on the rise. However, prices fell last weekend due to rumors that import duty on imported oil was declining. The soybean market, which jumped above 10,000, collapsed last week to around 200. However, soybean crop is estimated to be damaged due to recent rains.

In the last few months, parallel to edible oils, the price of fennel has gone up from Rs 500 to Rs 1,200 and the price of isbagol has gone up from Rs 1,200 to Rs 200, and the price of rye has gone up from Rs 500 to Rs 600. There is talk of a long-term boom being less likely to take place when Shri Ganesha is planting cumin after Navratri. Currently cumin has limited income. Even in exports, trade is slow due to shortage of containers. According to the reports of the Spices Board, about 4.5 lakh tonnes of cumin worth Rs 5 crore was exported in the year 2020-21. That means exports have increased by 20 per cent. There is a lot of speculation about what will be planted after Diwali.