SEBI introduces new derivatives contracts in seven commodities, know why

New Delhi: To check inflation, the Center has suspended trading in futures contracts of some agricultural commodities for a year. The Securities and Exchange Board of India (SEBI) on Monday asked commodity exchanges not to launch futures contracts for soybean, crude palm oil, wheat, rice, gram, green gram, rapeseed and mustard for one year.

As per a SEBI order, for running the contracts, the market regulator has said that no fresh positions will be allowed in these commodities. According to a release, the latest instructions will come into force with immediate effect. The Sebi statement said that the directions will be applicable for one year.

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The Consumer Price Index (CPI) rose to 4.91 per cent in November, from 4.48 per cent in October, as the impact of cuts in fuel taxes showed, data released by the statistics department on Monday showed. A Reuters poll of economists expected inflation to exceed 5.10 percent.

There was no relief in consumer price inflation despite excise duty cuts by the government and states, which did not provide much relief to contain inflation. Analysts believe that a weak domestic currency could also add to the price pressure at the retail level.

Meanwhile, wholesale inflation also rose to 14.23 per cent in November, from 12.54 per cent a month ago. This was the eighth consecutive month in which it remained at double-digit levels.

The data showed that food prices, which contribute to nearly half of the CPI, rose 1.87 per cent in November, from 0.85 per cent in the previous month. In its December bi-monthly meeting, the RBI retained its retail inflation forecast for the financial year at 5.3 per cent.