FMC marks up open interest limit for 18 commodities

Our Bureau Mumbai | Updated on December 11, 2014

Accepts traders' request as existing position limits are impacting the liquidity

In a bid to increase liquidity, the commodity markets regulator Forward Markets Commission has raised the open interest limit for 18 commodities. Open interest is the number of contracts or commitments outstanding in futures trading on an official exchange at any one given time.

There were numerous representations from hedgers and value chain participants that the existing position limits are small and affecting liquidity and depth of the market, said FMC in a statement.

Adequate position limits will bring wider participation and improve the quality of price discovery.

The existing trading volumes and participation on the commodity exchanges are far short of its true potential as India figures in the top five rankings globally in terms of production and consumption of various agricultural commodities, it said.

The client level open position limit in rapeseed/mustard seed was doubled to 30,000 tonnes and soyabean to 60,000 tonnes, respectively.

The limit for refined soya oil was raised to 35,000 tonnes from 25,000 tonnes.

In castorseed, it moved up to 12,000 tonnes from 8,000 tonnes and in cotton it was marked up to 150,000 bales from 65,000 bales.

Limit was also raised for chana, cotton seed oil cake, crude palm oil, dhaniya, jeera and mentha oil.

In metal space, gold, aluminium and copper open interest was raise to 5 tonnes (3 tonnes), 25,000 tonnes (15,000 tonnes) and 7,000 tonnes (5,000 tonnes), respectively.

Limits were also enhanced in nickel, zinc and silver.

Published on December 11, 2014

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