iGrain India - Mumbai. The Chief Executive Officer (CEO) of a leading business establishment of the country has demanded the removal of the ban on futures trading in oilseeds and oil, saying that after June 4, when a new government will be formed at the Centre, the Solvent Extractors Association of India will (c) Special emphasis should be given to two demands.
The first demand should be to restart futures trading in palm oil, soybean oil and oilseeds while the second demand should be to increase the import duty on edible oils which has been set at a very low level for a long time. According to the CEO, banning futures trading in oilseeds and oil was unfortunate.
The government has extended its deadline till December 2024. Futures trading in sunflower oil is currently underway. Its futures price for June contract is trading at Rs 870-875 per 10 kg, which is slightly higher than the prevailing futures price of Rs 865-870 per 10 kg for May delivery.
There is little possibility of further decline in the futures price for the June contract. The price of Rs 870 is the bottom level. The futures price of sunflower oil for delivery in July-August may improve to Rs 890-900 per 10 kg.
Solvent Extractors Association of India has repeatedly urged the government to ban futures trading in palm oil and soya oil. When the domestic market prices of edible oils had softened, there was hope of lifting this ban. Even now there is not much momentum in edible oils.
A strong request will be made to the new government for this. The price of soybean has decreased significantly.
If the futures ban is abolished before the start of new sowing, then the enthusiasm and attraction of farmers to increase the area will increase.
Last month, workers at soy processing plants in Argentina went on strike. Heavy rains in Brazil and Argentina have slowed soybean crushing-processing. This may provide an opportunity to India to increase the export of soybean DOC.