Edible Oil Industry Urges Government to Lift Ban on Futures Trading

The Solvent Extractors Association of India (SEA) urged the government to lift the ban on futures trading in key agricultural commodities. Implemented in December 2021, the ban affects price risk management in the edible oil sector. SEA argues futures trading doesn't drive inflation and calls for policy revision.

The Solvent Extractors Association of India (SEA) intensified its call this Monday for the Indian government to lift the ongoing ban on futures trading in critical agricultural commodities, including crude palm oil and soybean. The industry claims the restriction, in place since December 2021, has significantly impacted its financial health.

Originally imposed on seven agricultural commodities, the ban has seen multiple extensions and is currently expected to last until December 20, 2024. SEA has made formal appeals to key government officials, including Home Minister Amit Shah and Finance Minister Nirmala Sitharaman, stressing that the absence of futures trading impedes effective price risk management.

SEA President Sanjeev Asthana emphasized that the ban hampers an essential tool for risk mitigation in price-sensitive markets, calling for its removal to ensure smoother industry operations. The association also pointed out that current pricing trends are concerning, with soybean prices below and rapeseed slightly above government-set minimum support prices. SEA insists futures trading is not a major driver of inflation, urging a policy change.

(With inputs from agencies.)