INDIA’S market regulator called a halt to futures trading in key farm commodities yesterday, as the world’s biggest importer of vegetable oils, and a key producer of wheat and rice, struggles to tame food inflation.

The year-long suspension, India’s most dramatic move since it allowed futures trade in 2003, threatens market confidence by making hedging difficult for traders, weeks after farmers ended a year of protests that led to scrapping of contentious reforms.

“It’s like shooting the messenger, but we have sympathy with the government, because they were worried over edible oil inflation,” said Atul Chaturvedi, president of trade body the Solvent Extractors Association of India.

In its order, the market regulator told commodity exchanges not to launch futures contracts of soybean, soyoil, crude palm oil, wheat, paddy rice, chickpea, green gram, rapeseed and mustard for a year.

For existing contracts, no new positions would be allowed in these commodities, said the regulator, the Securities and Exchange Board of India (SEBI).

Indian prices of edible oil prices stand near record highs, which prompted New Delhi to substantially cut taxes on imports of palm, soy and sunflower oil, but the step had only marginal impact as global prices jumped.

With global prices expected to moderate in a few months, however, India could have suspended the futures for three or four months instead of a year, Chaturvedi added. (SD-Agencies)