Friday, December 23 2005 19:14 Hrs (IST) - World Time -

New Delhi: Government is mulling the option of allowing futures trading on essentials like onion and, potato to remove price volatility witnessed by these widely traded commodities.

"We are studying the option of allowing commodities like onion and potato at futures trading platform to bring in price stability in these essential items in the market," Consumer Affairs Secretary L Mansingh said.

"Futures trading on these commodities would help removing frequent short-run price fluctuations often caused due to the artificial scarcity," he said.

A high-powered sub-committee under Additional Consumer Affairs Secretary Alka Sirohi has been recently constituted to study the issue and make recommendations.

"We are expecting to submit a report on allowing essential commodities like onion and potato at the futures platform in the next three months," Sirohi said.

Members of the sub-committee also include representation from commodity exchanges and the commodity regulator Forward Markets Commission.

The sub-committee would submit its report to Agriculture and Consumer Affairs Minister Sharad Pawar, who would forward the recommendations to the Cabinet for final approval.

After that, FMC can give green signal to futures trading in onion and potato at the commodity exchanges.

Commodity exchange like NCDEX has already supported the idea of futures trading on perishable agricultural commodities including onion and potato.