SEBI extends suspension on trading in select agricultural commodity derivatives until Jan 2025

The Securities and Exchange Board of India (SEBI) on Wednesday extended the suspension of trading in derivative contracts for certain agricultural commodities, including wheat and moong, till January 31, 2025.

The other such agricultural commodities include paddy (non-basmati), chana, mustard seeds and its derivatives, soybean and its derivatives, and crude palm oil.

The suspension, which originally began on December 19, 2021, has been extended multiple times over the years to rein in prices.

Initially, SEBI had directed stock exchanges with commodity derivatives segments to halt trading in these contracts until December 20, 2022. The ban was subsequently extended for an additional year each in December 2022 and December 2023, effectively suspending trading until December 20, 2024.

"In continuation of the said directions, the suspension in trading in the above contracts has been extended till January 31, 2025," the regulator said in a release.

The suspension permits the squaring up of existing positions in these commodities, but no fresh futures trading is permitted for a year.

This move aims to curb excessive speculation and volatility in the commodity markets, particularly in these essential agricultural products, which have a significant impact on food prices and inflation.