Chana, soybean, CPO, 4 other agri commodities' futures remain banned: SEBI

Capital market regulator SEBI on Friday extended a ban on futures of chana, soybean, crude palm oil (CPO) and four other agricultural commodities until March 31, 2027.

In other words, trading in the seven agri commodity futures will remain suspended till the end of the next financial year, which begins on April 1.

Which agri commodities are impacted by the extended ban?

• Chana
• Soybean
• CPO
• Paddy (non-basmati)
• Wheat
• Mustard seeds
• Moong

The regulator directed exchanges dealing in commodity derivatives to keep these commodities out of their futures segments.

What does this development mean?

It essentially means that these commodities will continue to be unavailable for trading in the futures market.

Futures are a type of derivative contracts that enable participants to speculate on the prices of commodities without actually owning them. Some futures necessitate delivery, while others don't.

What is this ban all about? When was it introduced? Why do regulators ban specific contracts?

SEBI introduced the ban on the futures contracts of the seven agri commodities back in December 2021.

The restrictions were put in place in order to curb food inflation and speculation.

The regulator later extended this ban several times in view of the market situation.

The last extension was announced on March 24, 2025.

Regulatory authorities often decide to extend these restrictions in order to maintain price stability.

Here are answers to frequently asked questions (FAQs) about this development:

What has the regulator done? How does it impact traders?

It has extended en existing ban on futures trading in seven key agri commodities for another whole year, until the end of FY27.

That means no futures trading in these items for another year. So these commodities will stay out of the futures market.

Nothing changes for traders as such, as these contracts are anyway not being traded at the moment.

However, those who have been looking for the ban to be lifted will have to wait at least until March 31, 2027. There is no guarantee, as of now, whether the ban will be lifted then.

What does this mean for the market?

It simply means no speculative trading in these commodities for now.

Participants cannot bet on future prices through derivatives.

Is physical trade going to be available?

Yes> Physical trade will continue as usual.

What are futures, exactly?

Futures are contracts to buy or sell a commodity at a future date.

Traders don’t always need to own the commodity through this instrument.

It’s often about price bets -- not actual delivery.

Why was the ban introduced in the first place?

These bans are aimed at controlling food inflation and curbing excessive speculation in the market.

What prompted the regulator to enforce the ban?

Price volatility triggered the regulator to step in.

Why does the regulator keep extending it?

Food prices are one of the most sensitive in the essentials basket. Any unchecked speculation can amplify volatility.

This is exactly why authorities take such measures to ensure stability.

Regulators always prefer stability over free trading.