Markets watchdog Sebi has banned the launch of new derivative contracts of crude palm oil, moong, wheat and few other agricultural commodities with immediate effect amid rising inflation.
With respect to running contracts, no new position will be allowed to be taken and only squaring up of positions will be allowed. The directions will be applicable for one year, Sebi said in a release on Monday. Launch of new contracts of paddy (non-basmati), wheat, soyabean and its derivatives (its complex), crude palm oil and moong have been barred till further orders.
The list includes chana, and mustard seeds and its derivatives (its complex). The derivative contracts for these commodities were suspended earlier this year.
Deepak Jasani, Head of Retail Research at HDFC Securities, said banning derivatives for seven agricultural commodities for one year seems to be a knee jerk reaction to the unrelenting inflation pressure from food items.
National Commodity and Derivatives Exchange Ltd (NCDEX) said no fresh positions, including intra-day, will be allowed in respect of futures and options contracts of certain commodities and only squaring up of existing positions will be allowed.