NEW DELHI, INDIA — In an attempt to curb rising food prices, the Securities and Exchange Board of India (SEBI) on Dec. 20 directed local stock exchanges to suspend trading of seven agricultural commodities, effective immediately, for one year.
The commodities impacted include crude palm oil, soybeans and its derivatives, rice paddy (non-basmati), wheat, chana, or chickpeas, mustard seeds and its derivatives, and moong, or green gram, according to the SEBI.
Traders will be allowed to square off their positions, but new trades cannot be executed, the SEBI said.
The move was in response to a steep increase in food prices in recent months.
Edible oil prices reached record highs this year, prompting India’s government to cut taxes on imports of palm, soy and sunflower oil in October. But the measure had only limited impact, as global prices remain high and volatile.
The SEBI’s decision to suspend trading drew a mixed reaction.
“It’s like shooting the messenger, but we have sympathy with the government, because they were worried over edible oil inflation,” Atul Chaturvedi, president of edible oil trade body the Solvent Extractors Association of India, told Reuters.
India’s retail inflation, which is measured by the Consumer Price Index, in November increased to a three-month high of 4.91%, with food prices also rising, according to data from Ministry of Statistics and Programme Implementation.
Wholesale inflation, measured through Wholesale Price Index, during November accelerated to 14.23% from 12.54% a month ago, marking its eighth consecutive month at double-digit levels.