Mumbai: Market Regulator Sebi (Securities and Exchange Board of India) ordered a year-time suspension in the main agricultural commodity on Monday, as the largest importer of vegetable oil in the world, and a key manufacturer of wheat and rice, struggling to be domestized.
food inflation.
Halt, the most dramatic step of India because it allowed futures trading in 2003, threatening market trust by conducting difficult hedging for traders, weeks after farmers ended a year of protest which led to controversial reform exclusion.
“It’s like shooting messengers, but we have sympathy with the government, because they are worried about eating oil inflation,” Atul Chaturvedi, president of the Indian Solvent Extractor Association President, told Reuters.
In its order, market regulators told commodity exchanges not to launch futures contracts from soybeans, soybean oil, crude palm oil, wheat, rice rice, beans, gram green, rapeseed and mustard for a year.
For existing contracts, there are no new positions to be permitted in this commodity, added Sebi.
The price of eating oil prices stands near the highest record, which encourages New Delhi to substantially cut taxes on oil palm, soybeans and sunflower oil, but the move only has a marginal impact because the global price soared.
However, at a global price it is expected to be moderate in a few months, the government can suspend the future for three or four months, not one year, Chaturvedi added.
Step Monday will make it difficult for the importers and oil traders who can be eaten to do business because they extensively use domestic exchange to protect their risk, said Sandeep Bajoria, Chief Executive Oil Broker and Sunvin Group Consultation.
“The flow of imports will slow in the short term because traders do not have a hedging platform,” Bajoria added.