The Government together with industry should work towards protecting the rights of all stakeholders viz., producer, consumer and traders operating in the commodity futures market, Union Minister of State for Consumer Affairs, Food and Public Distribution, Mr C.R. Chaudhary said at an ASSOCHAM event held in New Delhi today.
“We need to strike a balance between producer, consumer and trader for sustainable growth and development of commodity futures market in the long run,” said Mr Chaudhary while inaugurating an ASSOCHAM Commodity Futures Market Summit.
“Traders will grow when they deal fairly with consumers and producers, while the producers will become self-sufficient and satisfied if they get their return together with cost of production and labour and the consumers want things to be made available at affordable prices,” said the Union Minister of State.
“In future trading, sometimes speculators play a major role in fixing and jacking up prices by making promises to purchase small quantity at very high prices,” he lamented.
Recalling the crisis in futures trade of guargum, the Minister said, “About 3-4 years ago, some party just increased the prices that reached Rs 30,000 per quintal thereby making it equivalent to gold, I could never imagine that guar could be sold at more than Rs 3,000 per quintal but it was due to gamble of certain speculators and today no one is buying guar at Rs 2,500 per quintal.”
He said that though farmers often complaint to him about drastic decline in prices of commodities. “I told them that you too are responsible for the same to some extent as if there is a jump in prices of a particular commodity owing to some reason or the other, you start producing only the same like in the case of onion.”
The Minister also said that excess production also considerably reduces the prices of the produce and even traders are also not able to make much profits.
“As such we have to make some arrangements, like the government has to think on setting up cold storages near production hubs of perishable commodities so they can be stored and sold at an apt price,” said Mr Chaudhary.
“Besides, there is also a need to simultaneously develop processing centres for the producer and trader to realise the right cost,” he added.
He also said that the industry should chalk out all the rules, regulations, policies that are hindering the growth of commodity futures market and carry out discussions thereby also considering each from the perspective of producer, consumer and trader.
He assured that his ministry would take up the industry’s specific suggestions and demands about how to make commodity futures market more sustainable with concerned government authorities.