SOPA opposes FMC's move to extend trading hours till night

Says extending trade hours will lead to illicit trade as exchanges are already witnessing lack of confidence from investors due to NSEL crisis

Soyabean processors body SOPA has opposed the FMC's decision to extend trading hours till late night in the agriculture commodities including soyaoil and soyameal, saying it will increase illicit trade.

On March 14, commodity market regulator Forward Markets Commission (FMC) extended trading hours on exchanges in ten agriculture commodities beyond 5 pm to 11.30 pm, effective from April 1.

Rajesh Agrawal, Soybean Processors Association of India (SOPA) Coordinator and Spokesperson, told PTI, "We have written a letter to FMC pointing that extending trade hours beyond 5 pm would lead to illicit trade" as exchanges are already witnessing lack of confidence from investors due to NSEL crisis.

However, the FMC in its order had said: "Domestic participants are often unable to hedge adequately their risk associated with international price movements in certain agricultural commodities during evening hours."

On decision to increase the trading volumes, Agrawal said," When all the physical markets would be closed it does not make any sense to open the exchanges. And we don't feel markets volume will increase with this step."

SOPA in the letter to FMC has advocated for focus on increasing the depth of commodity markets rather than increasing trading hours.

"The focus should be on increasing the depth of exchanges where more players with higher trading volumes enter the exchanges," he said.

Agrawal further said Indian commodity markets are not as mature as some western markets and even countries like China have allowed trading for four hours only.