Commodity markets regulator Forward Markets Commission (FMC) has reduced margins by 50 per cent on all contracts of soyabean and mustard seeds from Friday.
In a circular, the Commission said that special margins of 10 per cent (in cash) on the long side of all existing contracts of soyabean and rapeseed/mustard (R/M) seeds have been reduced to 5 per cent.
“The structure of special margin will come into effect from the beginning of trading day June 8, in all the running contracts and yet-to-be launched contracts,” the circular added.
In view of the recent trends in the prices of soyabean and R/M seed contracts, the Commission had decided to revise the existing rate of special margin, Forward Markets Commission said.
Margin is a deposit that is required to be given by traders before entering into a pact to buy or sell the commodity at future date.
Keywords: mustard seed
It has become a habit for the FMC to change the contract-terms before
the contracts expire. This is plain and simple "cheating" by the FMC
which has fiduciary and regulatory role. Reports of such changes
almost every week have become routine after there was change of guard
at FMC and a "acting" Chairman was allowed to hold the reins of the
commodity regulation for over one year now, thanks to the
administrative paralysis in the Department of Consumer Affairs, DoPT
and the PMO. The data does not justify such frequent changes in
contract terms. In order to preserve the sanctity of the contracts, it
is imperative that an investigation is conducted on sudden spurt in
the number of times contract terms are changed by the FMC as compared
to those during the tenure of the predecessor of the present
incumbent.
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