India: Industry body urges Centre to allow futures trading in crude palm and soybean oil

Published 2024년 11월 26일

Tridge summary

The Solvent Extractors’ Association of India has called on the government to reconsider the ongoing suspension of futures trading in commodities such as crude palm oil and crude soybean oil, a measure initially imposed by the Securities and Exchange Board of India in December 2021. As a significant consumer and importer of vegetable oil, India depends heavily on imports, and the industry body claims that the suspension has led to financial losses and weakened risk management tools. They stress the necessity of a strong futures market for effective price risk management and reliable price signals. Although studies indicate that futures trading is not a primary driver of inflation, the suspension has been extended until December 2024, depriving the industry of vital hedging mechanisms and the government of important price signals.

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Original content

The edible oil industry body has once again requested the government to reconsider resuming futures trading in internationally traded commodities like crude palm oil and crude soybean oil. In December 2021, the Securities and Exchange Board of India (Sebi) suspended futures and options trading in seven agricultural derivatives, including the two commodities mentioned above. Notably, India is the world’s second-largest consumer and number one vegetable oil importer, and it meets 55-60 per cent of its needs through imports. The Solvent Extractors’ Association of India, recently sent a memorandum to the central government seeking reconsideration of the 2021 decision and directing SEBI to resume futures trading in all commodities or, at the very least, in internationally traded commodities like crude palm oil and crude soybean oil. In the absence of trading on commodity exchanges, the industry body SEA argued that its members have faced immense challenges, including financial losses. ...

Source: UkrAgroConsult