NCDEX expects SEBI to relaunch oilseed futures trading, says official
Informist, Friday, Oct 27, 2023
By Afra Abubacker
MUMBAI – The National Commodity and Derivatives Exchange expects the Securities and Exchange Board of India to allow the relaunch of trading in derivatives contracts in certain commodities like oilseeds that are heavily imported and internationally traded, said Kapil Dev, chief business officer at NCDEX.
Earlier today, SEBI extended the ongoing suspension of futures and options trading in seven agricultural commodities including non-basmati paddy, wheat, chana, mustard seeds and its derivatives, soybean and its derivates, crude palm oil, and moong till Dec 20, 2024.
EXCLUSIVE
These seven commodities first came under trading suspension by SEBI in December 2021. It was meant to be in effect till Dec 20 last year, but SEBI extended the trading suspension by one year till Dec 20.
The suspension of derivative trading was due to inflationary fears amid surging commodity prices.
"It is still too early, we may get certain commodities like oilseeds back," Dev told Informist. "Futures are only a mirror of fundamentals in the market, and we will continue making our representations to SEBI."
Major oilseed producers like the Solvent Extractors' Association and Mustard Oil Producers Association of India have been actively demanding the relaunch of futures trading.
Against the overall demand of 25 mln tn of edible oil, India imports around 15 mln tn of edible oil from Indonesia, Malaysia, and Brazil where derivative trading is active. Soybean and palm oil prices on the Chicago Board of Trade and Bursa Malaysia Derivatives are considered benchmarks, respectively.
"Our market is fully dependent on foreign markets, and we are left with no option except to watch all activities as a mute spectator because there is no hedging platform available in India," Mustard Oil Producers Association of India had said in a letter dated Oct 3 to Food Minister Piyush Goyal.
"When future trading was operational, our imports were approximately 14-15 mln tn every year, but since the ban on future trading, the imports have increased to around 16.5 mln tn," said the letter. End
