Agri Picks Report November 09, 2023: Geojit

commodities

Geojit's report on Agri Picks

The National Commodity and Derivatives Exchange is set to launch sunflower oil futures contracts on Sunday. The domestic bourse will release the official circular and contract specifications later in the day, said Kapil Dev, chief business officer at NCDEX. "NCDEX is expected to launch sunflower oil futures on Diwali Muhurat trading day," said Dev. Initially, contracts for three months to February will be launched and the expiry of the contract will be the last trading day of the month. With the launch, sunflower oil futures will be the only edible oil trading on the derivatives market. On Oct 27, SEBI extended the ongoing suspension of derivatives trading in seven agri-commodities, including mustard seeds and its derivatives, soybean and its derivates, and crude palm oil till Dec 20, 2024. Major oilseed producers like the Solvent Extractors' Association and Mustard Oil Producers Association of India have been actively demanding the relaunch of futures trading. The entire value chain in the sunflower oil industry is likely to participate and benefit from the futures contract launch, said Dev. The exchange has set the basis center for sunflower oil futures in Chennai. There is no additional center as the trade is fully cash-settled, he said. Against the overall demand of 25 mln tn of edible oil, India imports around 15 mln tn from Indonesia, Malaysia, and Brazil where derivatives trading is active. Soybean and palm oil prices on the Chicago Board of Trade and Bursa Malaysia Derivatives, respectively, are considered benchmarks. The launching of sunflower oil futures will give Indian importers a platform to hedge against international price volatilities. "Our market is fully dependent on foreign markets, and we are left with no option except to watch all activities as a mute spectator because there is no hedging platform available in India," Mustard Oil Producers Association of India had said in a letter dated Oct 3 to Food Minister Piyush Goyal. "When futures trading was operational, our imports were approximately 14-15 mln tn every year, but since the ban on futures trading, the imports have increased to around 16.5 mln tn," said the letter.

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