Kolkata: The Soybean Processors Association of India (SOPA) has brought to the notice of the agri-commodity exchange National Commodity and Derivatives Exchange (NCDEX) that the soybean futures contract on NCDEX has been completely taken over by the speculators. SOPA has written a letter to NCDEX managing director Arun Raste on this issue.
SOPA chairman Davish Jain has requested NCDEX to increase margin money from the current 25% to 50% for lean season contracts and to reduce the circuit limit in the lean season to 2% a day to curb speculation in soybean futures.
A media release issued by SOPA on Monday said “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 – soybean meal, is suffering badly because of the excessive speculation. ”
SOPA said that 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 four times. Although the supply and demand situation 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.
Soybean Indore futures closing prices have gone up from Rs 7,478 on Jul 15 to Rs 9,106 on July 26, the media release added.