The Multi Commodity Exchange of India has introduced futures trading in crude sunflower oil, offering new risk management tools for the country’s edible oil industry as import reliance and global price volatility persist.
The Multi Commodity Exchange of India has launched futures trading in crude sunflower oil, widening the range of hedging tools available to India’s edible oil industry as it contends with heavy import dependence and volatile global prices.
According to the exchange, the contract is intended for importers, refiners, processors and traders that need protection against swings in the cost of a product that is closely tied to international supply conditions, currency moves and changes in other edible oil prices. India consumes about 26 million to 27 million tonnes of edible oil a year, and more than 60% of that demand is met through imports. Sunflower oil makes up roughly 9% of domestic edible oil consumption, with annual crude sunflower oil use estimated at about 3 million tonnes, of which nearly 2.8 million tonnes are imported.
Praveena Rai, managing director and chief executive of MCX, said the new futures contract would offer a transparent and efficient exchange-traded way to manage price exposure and support the development of the domestic edible oil market. The contract will be cash-settled and quoted on an Ex-Tank JNPT basis, excluding sales tax and goods and services tax.
The launch adds to MCX’s broader derivatives offering, which already includes crude oil futures used to hedge global energy price moves. It also comes as Indian exchanges continue to expand commodity products linked to internationally traded benchmarks, including planned Brent-linked crude contracts on the National Stock Exchange, as exchanges seek to deepen liquidity and give market users more precise risk-management options.
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