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: