SEBI suspend future trading in seven agricultural commodities

Tags: Economics/Business

  • The Securities Exchange Board of India (SEBI) has suspended futures and options trading in seven  agricultural commodities; Paddy (non-basmati), Wheat, Bengal gram (chana dal), mustard seeds, soyabean , crude palm oil and green gram (moong dal) till December 2022.
  • This was done by SEBI after the Ministry of Finance issued a directive to the regulator on December 19, 2021.
  •  The government fears that the speculation in the future trading in these agricultural commodities will lead to rise in the prices of the agricultural commodities which will further increase food inflation in India.
  • The Reserve Bank of India has targeted Consumer inflation at 5.3% for the current financial year 2021-22.

 Commodities Exchanges 

  • These are markets where various commodities are traded. Here commodities means products which are used as raw materials for other sectors like crude oil, gold, silver, agricultural products like wheat, rice, etc.  It is different from share markets where the shares of a company are bought and sold.
  • Commodities exchanges use derivatives contracts like futures and options to trade in the commodities.
  • In India Commodity exchange is regulated by SEBI. 
  •  In India there are 19 commodities exchange and six national commodities exchange.

The National Commodity exchanges are as follows 

1. Multi Commodity Exchange of India (MCX), Mumbai

2. National Commodity and Derivatives Exchange of India (NCDEX), Mumbai

3. National Multi Commodity Exchange (NMCE), Ahmedabad

4. Indian Commodity Exchange (ICEX), New Delhi

5. ACE Derivatives & Commodity Exchange Limited, Mumbai

6. Universal Commodity Exchange Limited, Navi Mumbai.

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