National Commodity and Derivatives Exchange (NCDEX) and Multi Commodity Exchange (MCX) are looking to resume futures trading in black pepper after getting approval from capital markets regulator Sebi.
Black pepper futures trading in Ncdex was stopped four-and-a-half years ago after the Food Safety and Standards Authority of India (FSSAI) seized a lot of over 6,000 tonnes from its warehouses on complaints of mineral oil contamination.
NCDEX is exercising more care this time. “We have approached Sebi for approval. We may follow Fssai norms for futures trading so there won’t be complaints,“ said Kalpesh Sheth, NCDEX assistant vice-president for marketing.
Pepper exporters said senior officers from MCX had met them for starting pepper futures.
“MCX may begin futures trading soon and the minimum lot is likely to be 1 tonne. However, it remains to be seen how much participation there will be as trading and delivery norms are likely to be strict,“ said Jojan Malayil, CEO of Bafna Enterprises, an exporter.
Black pepper production in the country has been below previous years’ levels.Last year, production was about 40,000 tonnes. However, this year it is expected to be better at 55,000 tonnes, which may be sufficient for domestic consumption.Though official import figures are not available, it is said to be higher than exports, according to the trade.
“Vietnamese pepper is coming to India via Sri Lanka as there is lower duty as per a SAARC agreement. Over 2,000 tonnes have come this way. This is pushing down local black pepper prices,“ said exporter Kishor Shamji.
In the domestic market, pepper is selling for about `. 480 per kg, which is about . 200 lower than a year earlier.`