The commodities markets regulator, Forward Market Commission (FMC) will allow new contracts in Guar gum or other low production volume commodities, only after assessing the new crop.
The regulator has proposed to estimate the production in order to bring discipline in the market after the prices surged unrealistically due to low production, after that it will seek opinion from other exchanges. The assessment will be done mainly for Guar gum, Guarseed, Mentha oil and Cardamom.
In the month of March 2012, FMC banned all the contracts of guar seed and guar gum futures after the prices of guar seed touched a high of Rs 30,000 per quintal on the back of firm export demand, limited stocks and decline in production. However, despite the move, spot prices of guar seed increased 5% and guar gum increased 10% at that time.