Edible oil industry body Solvent Extractors Association of India (SEA) on Monday urged the government to lift the ban on futures trading in key agricultural commodities including crude palm oil and soybean. SEA says this is having a financial impact on its members. The ban, which was first imposed on seven agricultural commodities in December 2021, has been extended several times and the current extension is till December 20, 2024, PTI reported.
Appeal to five ministers
According to the news, Solvent Extractors Association of India has appealed to five ministers including Home Minister Amit Shah and Finance Minister Nirmala Sitharaman that the absence of futures trading has hindered price risk management and market development. Association president Sanjeev Asthana, in a memorandum to ministers, said the industry was hopeful that the suspension would be lifted for smooth operations, but the continuation of this restriction has further weakened an essential risk mitigation tool.
does not significantly increase inflation
The SEA stressed that studies were showing that futures trading did not significantly increase inflation, which was a major concern when the ban was imposed. The industry body said current soybean prices are running below the government-set minimum support price (MSP) of Rs 4,892 per quintal, while rapeseed prices are slightly above its minimum support price of Rs 5,950, PTI reported.
The association has particularly stressed the need to restart futures trading in internationally traded commodities like crude palm oil and crude soybean oil. It argues that the ban has exposed businesses to greater price volatility.
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