Active Stocks
Fri Jun 14 2024 15:58:47
  1. HDFC Bank share price
  2. 1,597.45 1.05%
  1. State Bank Of India share price
  2. 840.20 -0.44%
  1. Tata Steel share price
  2. 183.05 0.30%
  1. ICICI Bank share price
  2. 1,105.10 -0.20%
  1. Kotak Mahindra Bank share price
  2. 1,717.00 -0.54%
Business News/ Markets / Commodities/  Sebi extends suspension on futures trade in key farm commodities by a year
BackBack

Sebi extends suspension on futures trade in key farm commodities by a year

Sebi said the suspension of trading in futures contracts would continue for a year on soybean and its derivatives, crude palm oil, wheat, paddy rice, chickpea, green gram and mustard.

Annual retail inflation eased below the central bank's upper tolerance level for the first time this year in November amid a softer rise in food prices.Premium
Annual retail inflation eased below the central bank's upper tolerance level for the first time this year in November amid a softer rise in food prices.

Capital markets regulator Sebi has extended the suspension of futures and options trading in seven agricultural commodities, including wheat and moong, for one more year till December 2023 in a bid to rein in prices.

The other agricultural commodities suspended by Sebi are -- paddy (non-basmati), chana, crude palm oil, mustard seeds and their derivatives and soya bean and its derivatives.

The Securities and Exchange Board of India (SEBI) had last year ordered a year-long suspension of futures trading in key farm commodities, as the world's biggest importer of vegetable oils and a major producer of wheat and rice struggled to tame food inflation.

Annual retail inflation eased below the central bank's upper tolerance level for the first time this year in November amid a softer rise in food prices.

"The suspension of trading in the above contracts has been extended for one more year beyond December 20, 2022, i.e. till December 20, 2023," Sebi said in a statement on Wednesday.

The suspension permits squaring up of existing positions in these commodities, but no fresh futures trading is permitted in them for a year.

Earlier this month, the Commodity Participants Association of India (CPAI) had urged the government and Sebi to allow exchanges to resume trading in these seven agricultural derivatives contracts.

In its letter to the Finance Ministry and Sebi, the association had said the prolonged bans are detrimental to the Indian commodity market ecosystem and severely dent the perception regarding India's ease of doing business environment.

During the last one year, the price of some of these commodities has been below or around MSP, and many studies concluded that the commodity prices are predominantly governed by supply and demand factors, and trading on exchanges has no impact on the price, CPAI had mentioned.

The association suggested that easily reversible options, such as increasing margin and lowering open interest limits for commodity derivatives contracts may be resorted to in case significant volatility is observed in agri-commodity contracts. 

 

 

3.6 Crore Indians visited in a single day choosing us as India's undisputed platform for General Election Results. Explore the latest updates here!

Catch all the Commodity News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 21 Dec 2022, 01:24 PM IST
Next Story footLogo
Recommended For You
GENIE RECOMMENDS

Get the best recommendations on Stocks, Mutual Funds and more based on your Risk profile!

Let’s get started