Kolkata, Sep 14 - The principal cause for the price rise of essentials is not futures trading of agricultural commodities like food grains, but the drought in large parts of the country, according to Suman K. Bery, director general of think-tank National Council of Applied Economic Research (NCAER).

'My instinct is 'no',' Bery told reporters here Monday when asked whether the futures trading was leading to price rise of the domestic agricultural produces.

He said while drought is an important factor, large volumes of buffer stocks lying with the government can act as disincentive for traders.

'It is paradoxically the case that having large buffer stock can be a disincentive for private trade as they are not never sure when these stocks would be released,' he said.