The ACE board has impose special margins of Rs 500, 600 and Rs 700 per quintal on long positions of Rs 1,880, Rs 1,895 and Rs 1,910 respectively. On the short positions too, identical margins will be applied at Rs 1,825, Rs 1,815 and Rs 1,800 per quintal.

The board is monitoring the situation and will take appropriate actions when need arises, said Jayesh Shah, president of ACE. The long dry spell in the state is threatening the outstanding crop of oilseeds. Edible oil prices also spurted, it too had its impact oncastor, he added.

Because of steep margin and erratic price movement, trading has been affected. Traders are waiting for the new December contract which is expected to start around next week, said official sources.

Meanwhile, cash markets also turned jittery, as sentiments remained bullish thanks to the prolonged dry spell. Although, castor needs little water and dry spell would help increase its sowing, prices remained firm due to the bullish sentiment.

"The business conditions has become hazy amid thin volume and price disparity," said Prakash Mehta, director Swastic Overseas. He said adding, "while the seed price increased by Rs 200 per quintal, the oil price unable to match the pace, resulting in contraction of the basis, that is difference between seed and oil prices. The basis between seed and oil prices narrowed to Rs 25 from earlier level of Rs 40. It is worth noting that recently a lobby of castor oil millers issued a fiat to stop sale of oil below the basis of Rs 40. Its nothing butmanipulation by some powerful shippers, said sources. While castorseed prices continued to rose, there were a few takers for the oil. The seed price rose by Rs 150 per quintal in a week, while oil price increased by Rs 25 per 10 kg. Even though the prices recorded sharp gains, transactions hardly took place.

However, a curious pattern was noticed, the stockists and farmers turned into buyers. Normally, they should have been seller in the lean season, said sources. According to a market analyst, the current bull run is purely sentiment driven. Exporters are almost out of the market. Export demand is seen below normal. Overseas exposure of exports seems almost covered. Prices in the global markets remained static despite surge in domestic prices, indicating that the ongoing bull run is a result of an artificial supply squeeze. In the last week, ex-tank Rotterdam prices were quoted at Rs 1,100 per tonne, said a broker.

FMC to curb illegal futures trading

The Forward Markets Commission (FMC) hascarried out wide spread raids to take on illegal speculators. The country's only watchdog is intended to come down on brokers, indulging in illegal parallel futures trading. The raids were carried out at Ahmedabad, Mahesena and adjoining areas. The officials seized certain cryptic documents. The details of charge sheets and proposed actions are yet to be available, as FMC officials were not available for comments. An insider claimed that raids were conducted to curb illegal futures trading. In a bid to infuse fresh blood in the official futures FMC may raid Bhabhar and Satta Bazar, he added. The raids had generated a mixed feeling among the brooking fraternity. According to a leading broker, the illegal castor futures traded at Bhabhar should be stopped at any cost.

It is the route cause of unhealthy speculation as there are no restrictions on the position, hence powerful shippers could manipulate the Bhabhar, which eventually influenced cash markets also. Since last few months, traders of Bhabhar areminting money at the cost of the upcountry traders. It also influenced official futures trading, alleged a broker.