Securities and Exchange Board of India (Sebi) on Friday barred agri commodity exchange NCDEX from launching new mustard seed contracts till further orders. The market regulator’s move is a step towards curbing rising prices of mustard oil that has been pinching the pockets of Indian households for quite some time now.

The latest direction for the National Commodity & Derivatives Exchange Ltd (NCDEX) will come into immediate effect.

The Sebi notification says no new contracts should be launched until further orders. In respect of running contracts, no new position will be allowed to be taken. The order also said that market participants can only square off their existing positions.

Earlier in August, too, Sebi banned chana futures the same way with immediate effect. Sebi has not cited any reason for taking such steps in both chana and mustard contracts.

Edible oil industry executives said that the market regulator has taken this step to check the further rise in prices of mustard oil. Rising edible oil prices have been a major concern for the industry as well as consumers. Though prices have corrected by Rs 10 per litre in last two months, but they are still ruling high compared to last year.

Industry executives said according to the government data the average retail price of mustard oil (packaged) increased to Rs 183.50.

However, the move has irked Narinder Wadhwa, president, Commodity Participants Association of India (CPAI). “Overall turnover will have an impact if this abrupt banning of contracts continues. It is very difficult to bring back hedgers or traders in the ecosystem once the confidence is lost due to action like this. Turnover of rapeseed mustard will dip. Recent withdrawals of commodities have definitely shaken the confidence in agri-commodities,” he said.