Agri Picks Report: Geojit, November 09, 2023

 Agri Picks Report: Geojit, November 09, 2023

The National Commodity and Derivatives Exchange is scheduled to introduce sunflower oil futures contracts on Sunday, according to Geojit.

Geojit's Agri Picks report

Sunflower oil futures contracts will be introduced by the National Commodity and Derivatives Exchange on Sunday. The formal circular and contract specifics would be made available by the domestic bourse later today, according to NCDEX Chief Business Officer Kapil Dev. "NCDEX is expected to launch sunflower oil futures around Diwali Muhurat trading day," Dev said. Contracts for the first three months of February will be offered, with the final trading day of the month serving as the contract's expiration date. 

Following the debut, the sole edible oil traded on the derivatives market will be sunflower oil futures. The existing ban on trading derivatives in seven agricultural commodities—mustard seeds and their derivatives, soybeans and their derivatives, and crude palm oil—was prolonged by SEBI on October 27 and will remain in effect until December 20, 2024. The resumption of futures trading has been aggressively demanded by major oilseed producers such as the Mustard Oil Producers Organisation of India and the Solvent Extractors' Association. According to Dev, the introduction of the futures contract is anticipated to include and benefit the whole value chain in the sunflower oil business. The basis center for futures on sunflower oil has been determined by the exchange in Chennai. Since the deal is entirely cash-settled, there is no need for a second center, he added.

.. India imports over 15 million tons of edible oil annually from countries like Brazil, Malaysia, and Indonesia where derivatives trading is prevalent, compared to the country's total requirement of 25 million tons. Benchmarks include the prices of soybean and palm oil on the Chicago Board of Trade as well as Bursa Malaysia Derivatives, respectively. Indian importers will now have a platform to protect themselves against fluctuations in global prices thanks to the introduction of sunflower oil futures.

 The Mustard Oil Producers Association of India wrote to Food Minister Piyush Goyal on October 3, stating, "Our market is fully dependent on foreign markets, whereas we are left with no option except to watch all activities as mute spectators because there is no hedging platform available in India." "When futures trading was operational, our imported goods were approximately 14-15 mln tn every year, but since the ban on futures trading took place, the imports have gone up to around 16.5 mln tn," said the letter.