Trading in wheat, chana, mustard seeds, 4 other agri commodities suspended for additional year—Key things to know

Commodity Derivatives (Futures and Options Trading): The Securities and Exchange Board on India, the country’s capital market regulator, on Monday extended restrictions on bourses providing commodity derivatives from offering contracts in 7 agricultural a commodities including wheat, chickpeas and mustard seeds.  

The seven commodities are:

• Paddy (non-basmati)
• Wheat
• Chana
• Mustard seeds
• Soya bean
• Crude palm oil (CPO)
• Moong 

The latest extension comes days ahead of the end of restrictions, due on March 31, 2025.

Restrictions to continue on 7 commodity derivatives for additional one year | Paddy, wheat, chana, mustard seeds, moong, CPO, soya bean contracts on the list 

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Earlier, SEBI in December 2021 directed stock exchanges with the commodity derivatives segments to suspend trading in derivative contracts in the 7 commodities, till December 20, 2022. 

After that, the regulator extended the suspension till December 20, 2024, and then January 31, 2025, and then March 31, 2025.

“In continuation of the said directions, the suspension in trading in the above contracts has been further extended till March 31, 2026,” said SEBI in a communication dated march 24.

Commodity derivatives are special financial instruments that derive their value from the prices of underlying commodities such as gold, silver, base metals, coriander, castor seed and guar gum. 

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Just like normal derivative (futures & options) contracts, commodity derivatives enable traders to buy or sell in the segment without owning the underlying assets—in this case, commodities—directly. 

Derivatives contracts enable investors to trade large quantities linked to an underlying asset with a relatively smaller capital in comparison to that required to own the assets directly.

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Currently, exchanges such as MCX and NCDEX offer commodity derivatives in the domestic capital market.