News

SOPA demands circuit limit of 2% per day on NCDEX to curtail speculative activities

Pune: As Soybean futures contract on NCDEX has gone up by 21.77% during the past seven trading sessions and the upper circuit has been applied 4 times, industry body Soyabean Processors Association of India has written to NCDEX demanding that the circuit limit during the lean season should be limited to 2% per day.

The trade body has alleged that the present rise in soybean prices is due to speculative trading on the NCDEX. “The Soybean Futures Contract on NCDEX has been completely taken over by the speculators. The contract is no longer a price discovery and hedging tool. The soy processing and even the aquaculture/poultry industry, which uses the end product; the soybean meal, is suffering badly because of the excessive speculation,” said SOPA.

To support its claim, SOPA said, ” In the last seven trading sessions, the soybean futures contract on NCDEX has gone up by 21.77% and the upper circuit had to be applied 4 times.”

According to SOPA, although the supply and demand for oil in the year 2020-21 were slightly tight, it does not support the kind of price rise seen in the last few months. There is no physical stock in NCDEX warehouses which is further fuelling the speculation.

“To curtail speculation, we request to increase margin money from current 25% to 50% for lean season contracts and that the circuit limit in lean season should be reduced to 2% a day,” said SOPA in a release.

BOX: Soybean Indore futures closing prices:

Date Closing price
15.07.2021 7478
16.07.2021 7728
19.07.2021 7898
20.07.2021 8127
22.07.2021 8129
23.07.2021 8591
26.07.2021 9106

Articles You May Like

5 reasons why gold miners make more money than gold investors
Unemployment rate among Black Americans jumped in March, contrasting overall trends
Gold down on resurgent US inflation
Pound Sterling is under increasing bearish pressure with 1.2500 support in play
Singapore Q1 GDP +2.7% y/y (expected 3%)

Leave a Reply

Your email address will not be published. Required fields are marked *