Sebi extends ban on futures trading in 7 agri commodities till Dec 2024

New Delhi: In a bid to control prices, the Securities and Exchange Board of India (Sebi) has extended the suspension of futures and options trading in seven agricultural commodities, including wheat and moong, for one more year till December 2024. The other agricultural commodities suspended by Sebi are paddy non-basmati, chana, crude palm oil, mustard seeds and their derivatives and soya bean and its derivatives.

Extension of suspension

The suspension of trading in the above contracts has been extended for one more year beyond December 20, 2023, i.e. till December 20, 2024, Sebi said in a statement. The suspension permits squaring up of existing positions in these commodities, but no fresh futures trading is permitted for a year.

Curbing inflation

To curb inflation, Sebi in December 2021 prohibited exchanges from launching new derivative contracts of soyabean, mustard seeds, chana, wheat, paddy, moong, and crude palm oil. These directions were applicable for one year. In December last year, the suspension was again extended for one more year till December 20.

Industry's plea

Last year, the Commodity Participants Association of India CPAI had urged the government and Sebi to allow exchanges to resume trading in these seven agricultural derivatives contracts. The association had stated that prolonged bans are detrimental to the Indian commodity market ecosystem and severely dent the perception regarding India's ease of doing business environment.

The extension of the suspension of futures and options trading in these seven agricultural commodities reflects Sebi's continued efforts to moderate price volatility and ensure market stability. While the move may provide some relief to consumers, it remains to be seen how it will impact the overall agricultural commodities market in India.