Farm minister Pawar seen easing controls on trade

Commodity brokers say the government, which won elections on the back of rural support after it crushed inflation and gave farmers a high price for their produce, may again restrict futures trade and exports if prices rise sharply when key state elections are held in 2-3 years.

But the mood is upbeat in Indian commodity exchanges, where global finance majors Citigroup, Merrill Lynch and Goldman Sachs, as well as bourses like Intercontinental Exchange Inc and NYSE Euronext hold stakes.

"We now expect the government to allow rice futures. Other pending issues would also be resolved shortly," said Joseph Massey, managing director of Multi Commodity Exchange of India.

The previous government banned futures in several commodities as its leftist allies, whose support the new government does not need, blamed futures for high prices but the ban on wheat futures was lifted after the elections ended this month.

During Pawar's five-year tenure, India banned exports of non-basmati rice and wheat as it struggled to contain inflation, which had soared to a 13-year high of 13 percent last August, but its fall to nearly zero this year as well as bulging stocks of grain gives India room to ease curbs on futures and physical trade.