Sebi bars NCDEX from launching new mustard seed contracts

Markets watchdog Sebi on Friday barred commodity exchange NCDEX from launching new mustard seed contracts till further orders amid efforts to curb rising prices of mustard oil.

The latest direction for the National Commodity & Derivatives Exchange Ltd (NCDEX) will come into immediate effect.

In respect of running contracts, no new position will be allowed to be taken. Only squaring up of position will be allowed, Sebi said in a release.

"No new mustard seed contract shall be launched till further orders," it said.

Edible oil industry body Solvent Extractors Association's (SEA) Executive Director B V Mehta said Sebi has taken this decision to check further rise in prices of mustard oils.

Much of the mustard seed stock has been crushed and as a result there is pressure on prices, he added.

Tight supply of mustard seeds has put pressure on wholesale and retail prices of mustard oil.

As per the government data, the average retail price of mustard oil (packaged) increased to Rs 183.50 per kg on October 7 this year from Rs 128.50 per kg on October 8, 2020.

Against the total estimated mustard seed production of 85 lakh tonnes in the 2020-21 crop year (July-June), millers have crushed about 70 lakh tonnes and farmers are left with a stock of 14-15 lakh tonnes, according to industry data.

Mustard seed is a rabi (winter) crop, and the fresh arrival is expected only in February. At present, sowing of mustard seed has not yet commenced in North India due to relatively high temperature.