Sebi asks exchanges to review expiry of agro derivative contracts

Topics Sebi | Derivatives

The Securities and Exchange Board of India (Sebi) has asked exchanges to review expiry dates of contracts of agricultural commodities given the operational disruption caused by the ongoing 21-day nationwide lockdown amid the coronavirus pandemic.

Following Sebi’s instruction, the NCDEX —  India’s largest exchange for agricultural commodities — has extended expiry dates of all its agri contracts maturing on April 20 to April 30. “The exchange is continuously reviewing and taking decisions,” an NCDEX spokesperson said.

The exchange’s expiry for this month got over on March 20, days before the lockdown came into effect on March 21. Since the lockdown, the NCDEX’s trade volumes have dropped 50 per cent. Falling prices of crude oil, guar gum and seeds contributed to this decline.


Experts had been asking Sebi merge April and May contracts because of disruptions in the farm-to-fork supply chain. Vijay Sardana, a noted agriculture expert, said: “There are wide-scale disruptions in agri marketplaces, warehouses, mandis, and transport. These are ground realities. To avoid any uncalled-for scenario in the derivatives market, Sebi must ask exchanges to either merge April expiry contracts of agri commodities with May month contracts, or extend expiry dates.” 

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