The industry had hoped that the suspension would be lifted to enable smooth operations, but the continuation of the ban further weakens an essential risk mitigation tool, says SEA president Sanjiv Asthana.
Edible oil industry SEA on Monday called on the government to lift the ban on futures trading in key agricultural commodities including crude palm oil and soybeans, citing significant financial impact on its members. The ban, first implemented in December 2021 on seven agricultural commodities, has been extended several times with the current extension lasting until December 20, 2024.
The Solvent Extractors Association of India (SEA) has appealed to five ministers, including Home Minister Amit Shah and Finance Minister Nirmala Sitharaman, arguing that the absence of futures trading is hampering price risk management and market development.
“Industry had hoped that the suspension would be lifted to enable smooth operations, but the continuation of this ban further weakens an essential risk mitigation tool,” SEA President Sanjiv Asthana said in a presentation to ministers. was
The SEA emphasized that the study showed that futures trading does not significantly drive inflation, which was a major concern when the ban was implemented.
The current prices of soybeans are below the minimum support price (MSP) set by the government at Rs. 4,892 per quintal, while rapeseed prices were trading at Rs. 5,950 slightly higher than the MSP, the industry body said.
The association stressed the need to resume futures trading, particularly in internationally traded commodities such as crude palm oil and crude soybean oil, arguing that the ban has exposed businesses to greater price volatility.