SEA Demands More Curbs on Oilseed Futures

Hello Friends here we come up with the Latest Agri Commodities updates from various parts of the country.

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SEA demands more curbs on oilseed futures


SEA demands more curbs on oilseed futures:


The Solvent Extractors’ Association (SEA) has asked the government to raise margins and impose more curbs to prevent the misuse of futures trading in oilseed contracts.

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In a pre-budget memorandum to the finance ministry and the consumer affairs secretary (who regulates futures trade),

SEA asked, “the margin money required for oilseeds futures be enhanced to a level that will discourage pure speculative activity.”

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To curb this, oil seeds contracts should be restricted to one month, against six-monthly contracts currently, he said.

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“Existing futures contracts for the next six months should be squared off on the date of settlement of next month contract,” Sethia added.

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SEA has also said a percentage of the total traded volume by any trader be compulsorily settled by delivery so that it corresponds to prices in the physical market.

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These elements were using futures trade to build big positions and manipulate prices even at the time of harvesting, the official said.

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In Other major Commodities Update, there is news of 75 per cent of the local crushing capacity being remain unutilised even after two months of the beginning of the season.

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Three-fourth veg oil crushing capacity unutilized

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At a time when vegetable oil companies are worried over the growing dependence on imports due to stagnant domestic output,

about 75 per cent of the local crushing capacity remains unutilised even after two months of the beginning of the season.

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Generally, the Indian vegetable oil industry consisting of oil mills, solvent extraction units, vegetable oil refineries and vanaspati units commence the season during early to mid October.

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During this time, harvesting of soybean and arrivals in the mandi increase.

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Small to medium farmers commonly sell their produce to local traders (arhatiyas) who bring the seeds to mandis.

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But, big farmers are holding back their produce in anticipation of higher prices.

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Therefore, mandi arrivals in totality have declined by over 25 per cent so far this season from the normal 2.5-3 million bags during previous seasons.

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Also, crushers are not willing to take up their business due to price disparity.

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