Govt decision to ban potato futures questioned

May 08, 2008

Source

Potato farmers and traders have questioned the government's rationale behind banning futures trading in the crop when there is a glut in the market and prices have declined due to bumper production.

"There was no reason for the government to ban futures trading in potato as the crop's harvest is bumper, prices are stable and farmers are battling with the problem of plenty,"a former UP MLA and potato grower in Agra region, Pratap Choudhary said.

As an immediate fallout of the ban on futures trading of potato, industry experts fear that prices of the commodity may crash because of absence of price discovery mechanism.

The government on Wednesday suspended futures trading of potato along with rubber, chana and soya oil for four months.