SEBI Bans Chana Futures Trading

DELHI - Jun 18/06 - SNS -- Trading in the world's last pulse futures contracts was suspended on the NCDEX this week by the Securities and Exchange Board of India (SEBI).

In a written statement, SEBI said, "Considering the demand and supply gap, as reflected from the price trend in Chana and the supply constraints in near term, as an abundant caution, in respect of trading of Chana Future Contracts on the commodity derivatives exchanges. . . .

"It is hereby directed that no new Chana contract shall be launched till further orders.

"In respect of running contracts in Chana, no new position will be allowed to be taken. Only squaring up of position will be allowed.

"These directions will be implemented with immediate effect," SEBI said.

The last time trading in an agricultural futures market was banned in India was in 2012 when trading in guar was suspended. Trading in urad and tur were banned a decade ago.

Commenting on the ban, writers at India's Hindu Business Line newspaper said, "The low ratio between average daily traded volume and actual delivery of the commodity has stoked the regulator's concern on speculation. The average daily traded chana volume on the NCDEX in June was 25,800 MT (metric tons), while only 120 MT were marked for delivery.

"In May, the exchange traded 28,277 MT daily, while delivery was only 760 MT. Similarly in April, the peak arrival month, about 66,940 MT were traded and 2,280 MT were delivered on the exchange platform."