As soyabean futures touch a record high of Rs9,106 per quintal, Indore-based Soyabean Processors Association of India (SOPA) has urged the National Commodity and Derivatives Exchange (NCDEX) to take notice that the soybean futures contract on its platform has been completely taken over by the speculators.
In a letter written to NCDEX, SOPA said, “Over the past seven trading sessions, soyabean futures have gained 22 per cent from Rs 7,478 a quintal on 15 July to Rs 9,106 per quintal now.” The contract hit the upper circuit four times during this period, SOPA added.
In a media release issued by SOPA, Davish Jain, Chairman, SOPA said, “The contract is no longer a price discovery and hedging tool. SOPA has therefore asked NCDEX to take immediate steps to curb such speculation.”
SOPA has also requested NCDEX to increase the margin money from the current 25 per cent to 50 per cent for lean season contracts. Besides, it has suggested that circuit limit in lean season should be reduced to 2 per cent a day.
Soyabean futures gained 6 per cent on Monday, while in the spot market at Indore prices ended 1.61 per cent higher at Rs 9,558 per quintal. Similarly, in Kota, Rajasthan, spot prices gained 1.44 per cent at Rs 9,230 per quintal.
Further, there is no physical stock in NCDEX warehouses which is further fueling speculation, he added. SOPA said it is also taking up the issue with market regulator SEBI.
Meanwhile, SOPA, based on its field survey has estimated the soybean acreage at 109.62 lakh hectares (lh) as against the Agriculture Ministry’s estimate of 102.5 lh as of July 23. SOPA sees a 10 per cent increase in Maharashtra at 44 lh, while sowing has been affected in Rajasthan and Madhya Pradesh due to a ‘break’ in monsoon and erratic rainfall. SOPA estimates that the acreage is lower in Madhya Pradesh by 17 per cent at 48.51 lh, while in Rajasthan the sowing has been lower by 24 per cent. In Karnataka and Gujarat, the acreage is higher by 10 per cent and 34 per cent, respectively.