Derivatives

RM seed: No new positions

Gurumurthy K BL Research Bureau | Updated on October 16, 2021

The Securities and Exchange Board of India (SEBI), on October 8, announced some restrictions in trading Rapeseed-Mustard derivatives on the National Commodity and Derivatives Exchange (NCDEX). According to the decision, no fresh trading positions will be allowed to be taken in the Rapeseed-Mustard derivatives contract. This includes both the Futures and Options segment, and applicable to intraday trading positions as well. Market participants holding any positions will be allowed to square them off. SEBI has also directed NCDEX not to introduce any new derivatives (Futures and Options) contracts of Rapeseed-Mustard until further notice. At the moment, October and November month contracts are active in the Futures segment. Their respective expiry dates are October 20 and November 18.

According to industry experts, the move by SEBI is to curb price rise in the commodity. Historical data show that mustard seed prices on NCDEX have been broadly range-bound between ₹3,000 and ₹5,000 per quintal. But since March 2020, prices had surged about 132 per cent to a high of around ₹8,800 per quintal, on the back of supply deficit. However, thereafter, prices have come down from the peak. Currently, the NCDEX Rapeseed-Mustard October futures contract is trading at ₹8,200.

The decision by SEBI has been in effect from October 8, 2021.

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Published on October 16, 2021

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