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Informist, Monday, Nov. 25, 2024

 

MUMBAI – The Solvent Extractors' Association of India has urged the government to lift the ban on futures in key agricultural commodities, in a memorandum on Monday. The association has requested the government to allow future trading in especially internationally traded commodities like crude palm oil and crude soyoil. In the absence of trading on commodity exchanges, many market participants have faced immense challenges, including financial losses, the association said in the memorandum. 

 

The industry was hopeful that the suspension would be lifted to enable smoother operations, but the continuation of this restriction has further weakened an essential risk mitigation tool, the association said. Implemented in December 2021, the suspension of futures trading in seven agricultural commodities has been extended periodically. This ban is currently in place till Dec. 20.  

 

The association's President Sanjeev Asthana pointed out that the absence of futures trading deprives the edible oil industry of essential hedging mechanisms and price discovery, exposing businesses to greater price volatility and disrupting operations. The association also pointed out that current price trends are a bit concerning with mustard prices just slightly above the minimum support price of INR 5,950 per 100 kg and soybean prices still below the minimum support price of INR 4,982 per 100 kg.  End

 

Reported by Anjali Lavania

Edited by Akul Nishant Akhoury

 

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