The Solvent Extractors’ Association of India (SEA) has urged the Indian government to lift the ban on futures trading in edible oils to support farmers, the Business Standard reported.
First implemented in December 2021, the ban on seven agricultural commodities – wheat, paddy (non-basmati), chana, mustard seeds, soyabean, crude palm oil and moong – has been extended multiple times with the current extension running until 20 December 2024.
The SEA had appealed to five ministers, including Home Minister Amit Shah and Finance Minister Nirmala Sitharaman, saying that the absence of futures trading had impacted price risk management and market development, the 25 November report said.
“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,” SEA President Sanjeev Asthana said in a letter to the ministers.
According to the SEA, studies have shown futures trading does not significantly drive inflation, a key concern when the ban was implemented.
At the time of the report, soyabean prices were trading below the government-set minimum support price (MSP) of INR 4,892 (US$57.83) /quintal, while rapeseed prices were slightly above its MSP of INR 5,950 (US$70.34), the industry body said.
The association said futures trading in internationally traded commodities like crude palm oil and crude soybean oil needed to resume, saying the ban had left businesses exposed to greater price volatility.