Reinstatement of sugar futures will spur volumes and hedging

Experts say the removal of the ban on Indian sugar futures trading will spur volumes and is an important step towards reducing government control on its commodity futures market

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India's commodities market regulator, the Forward Markets Commission (FMC), lifted the ban on sugar futures last week, in a move that market experts say will spur Indian appetite for hedging.

The FMC banned sugar futures in May 2009 under the belief that speculative trading was responsible for pushing up food prices. Keeping food prices under control is a central issue for the Indian government, as 42% of the population are below the international poverty line and live on less than $1.25 a day.

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