Futures trading in seven agricultural commodities banned till January 31

20-Dec-2024 04:07 PM

The Securities and Exchange Board of India (SEBI) has extended the ban on futures trading for seven agricultural commodities until January 31, 2025. This extension applies to non-basmati rice, wheat, gram, moong, mustard and its products, soybean and its derivatives, and crude palm oil.

The ban, which began in December 2021, was initially imposed to stabilize prices and prevent speculative trading.

Previously, the ban period was extended by a year at a time, but this extension is for only one month, leading to hopes that the ban may eventually be lifted soon. The move is particularly significant for oilseeds and oil products, where strong lobbying efforts are already underway.

Producers, especially in the soybean sector, have expressed concerns over falling prices below government support levels, forcing the government to buy large quantities at set prices.

Despite a 20% increase in import duties on edible oils to boost domestic prices of oilseeds, the expected price rise has not materialized.

However, the prices of edible oils have increased due to the higher cost of imports. Analysts suggest that the government may soon remove soybean from the list of banned commodities to address these concerns.