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, says SEA President Sanjeev Asthana.
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Edible oil industry SEA on Monday called on the government to lift a ban on futures trading in key agricultural commodities, including crude palm oil and soyabean, citing significant financial impact on its members. The ban, first implemented in December 2021 on seven agricultural commodities, has been extended multiple times with the current extension running through 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 has hindered price risk management and market development.
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“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 representation made to the ministers.
SEA emphasised that studies have shown futures trading does not significantly drive inflation, a key concern when the ban was implemented.
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Current soyabean prices are trading below the government-set minimum support price (MSP) of Rs 4,892 per quintal, while rapeseed prices are slightly above its MSP of Rs 5,950, the industry body said.
The association particularly stressed the need to resume futures trading in internationally traded commodities like crude palm oil and crude soybean oil, arguing that the ban has left businesses exposed to greater price volatility.
