Chana futures suspended, only square off in existing positions will be allowed

As a "measure of abundant caution" in wake of rising prices of pulses, Securities and Exchange Board of India today temporarily suspended chana futures. The regulator has asked the exchanges that from immediate impact all chana future contracts be put under square off mode and no new positions be launched until further order.

Chana futures were active on National Commodity and Derivatives Exchange. Rising prices of pulses and its impact on inflation index was causing ripples among government and to ensure that derivative platform is not used for any price rigging, as an abundant caution, Sebi has put all contracts under square off mode. However this would be another blow to the agri-centric exchange NCDEX, which had lost huge volumes after it suspended castor seeds futures in January losing 20 per cent of its volumes.

Statement issued by the regulator 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, Sebi has directed exchange that no new Chana contract shall be launched till further orders and in all running contracts in Chana, no new position will be allowed to be taken. Only squaring up of position will be allowed".

Among pulses only chana was traded on futures. tur and urad were banned from futures a decade ago.