In a bid to increase liquidity, the commodity markets regulator, Forward Markets Commission has raised the open interest limit for 18 commodities. There were numerous representations from hedgers and value chain participants that the existing position limits are small and affecting liquidity and depth of the market. Adequate position limits will bring wider participation and improve the quality of price discovery. The existing trading volumes and participation on the commodity exchanges are far short of its true potential as India figures in the top five rankings globally in terms of production and consumption of various agricultural commodities.
Client-level open position limit in rapeseed and mustard seed has been doubled to 30,000 tonnes and soybean to 60,000 tonnes. FMC has increased OI limit in gold to five tonnes from three tonnes currently; in silver, open interest has been increased to 100 tonnes from 60 tonnes. In copper, it has been increased to 7,000 tonnes from 5,000 tonnes.
In the agri space, the limit for refined soya oil was raised to 35,000 tonnes from 25,000 tonnes. In castor seed, it moved up to 12,000 tonnes from 8,000 tonnes and in cotton it was marked up to 150,000 bales from 65,000 bales. Limit was also raised for chana, cotton seed oil cake, crude palm oil, dhaniya, jeera and mentha oil. Limits were also enhanced in nickel, zinc and silver.
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