Resume futures trading in crude palm and soybean oil: Industry body to SEBI

New Delhi [India], September 13 (ANI): Domestic edible oil industry body india">Solvent Extractors' Association of India requested financial market regulator SEBI to resume futures trading of internationally traded commodities such as crude soybean oil and crude palm oil.
In December 2021, the india">Securities and Exchange Board of India (SEBI) suspended futures and options trading in seven agricultural derivatives for one year.
In a letter to the SEBI Chairperson Madhabi Puri Buch, the edible oil industry body said the suspension of futures trading in these commodities deprived importers from hedging their price risks in rupee-denominated soybean oil and crude palm oil futures on the Indian commodity exchanges.
"In recent months edible oil importers have faced huge financial losses due to double whammy arising out of abnormal volatility in international and domestic prices on one side and weakening rupee on the other," the letter to the SEBI read.
With almost nine months passed by, the industry body feels there is a need to relook at the relevance of those suspensions.
Inferring price rises in those commodities as reasons for considering the suspensions, the industry body analyzed the price behaviour of all major edible oil and oilseeds and found that they behaved as per the larger international fundamentals -- which they were doing even before the suspension.
Notably, India is the world's second-largest consumer and number one vegetable oil importer, and it meets 55-60 per cent of its need through imports.
"We are of the considered view that futures market is not responsible for edible oil inflation as the same has been proved in the recent run-up which had nothing to do with futures market as the same was not operational," it said, adding that a healthy futures market is very important for price risk management. (ANI)