India halts futures trade in staple foods to fight ‘inflation’

NEW DELHI, May 8, 2008 (AFP) – India’s government on Thursday halted trading in futures contracts for key staple foods and for rubber as it battled to avoid an election drubbing due to high inflation. The government suspended futures trade in basic foods such as chickpeas, soybean oil and potatoes for four months, saying the move was aimed at stopping price rises driven by speculators. It also halted futures trade in rubber.

The ruling Congress-led coalition said more efforts were also underway to fight inflation in Asia’s third-largest economy, as cement producers Thursday joined steelmakers in pledging price cuts.

“The government is not helpless and it has means to ensure prices are brought down,” junior industry minister Ashwani Kumar said in New Delhi.

“More measures — both administrative and fiscal — are in the offing to control inflation.”

The promise by cement-makers to cut prices came a day after steelmakers said they would reduce charges following a plea by the government.

“In the course of the coming few days, a significant reduction in cement prices can be expected,” Kumar said after the government vowed further tough action against the sector besides an export ba