India's Parliamentary Standing Committee on Food and Consumer Affairs has called for a complete ban on futures trading in essential commodities like wheat, rice and sugar.

The committee has also opposed entry of foreign institutional investors in Indian commodities sectors, and especially the commodity exchanges.

It said the entry of foreign investors would only harm Indian farmers as futures trading does not benefit them in any way these days.

Member of Parliament Devendra Prasad Yadav, who heads the Standing Committee on Food and Consumer Affairs said that the Committee is of the opinion that futures trading in essential commodities such as sugar, coarse cereals and lentils should be banned immediately.

He said the vommittee has studied the bill proposing amendments to the Forward Contracts [Regulation] Act.

"We have studied the amendments in details. And we have recommended that futures trading in essential commodities should be stopped," Yadav told Commodity Online.

He said the Committee has informed the government that it entry of foreign investment into commodities trading is not in the larger interests of both the consumers and farmers.

Already, the government has banned forward trading in wheat, rice, tur and urad in an attempt to contain the rising inflation.

In the last few months, there have been immense political pressure on the government to ban futures trading in essential commodities such and cereals and pulses.

Political leaders led by the Left front have also opposed entry of foreign investors into commodities trading, especially the home-grown national commodity exchanges MCX, NCDEX and NMCE.

Already, a number of leading global investment companies have been talking to these exchanges to pick up strategic equity stakes in them to cash in on the booming commodities market in India.

Officials said it is not necessary that the government should abide by the recommendations from the Parliamentary Committee on futures trading and the entry of foreign institutional investors into India.

"Political resistance to futures trading in commodities is a real fact in India. It is mainly because politicians want to cash in on the farmers and agriculture sector for votes in elections," a senior official in the finance ministry pointed out.

He said the political resistance to futures trading in commodities can not stand for long, as globally forward trading in commodities is a huge business.