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| NCDEX Spot to launch pepper contract |
| BS Reporter / Kochi Mar 06, 2009, 00:28 IST |
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NCDEX Spot Exchange (NSPOT), the spot trading arm of India’s second largest commodity futures trading platform National Commodities and Derivatives Exchange (NCDEX), is launching a compulsory delivery contract of black pepper-garbled on Friday.
Initially, MG1 grade pepper will be traded on the online platform, but the exchange will launch a separate contract of un-garbled pepper in the near future. The selling points for the trade are Kochi and Kozhikode, the main producing centres for pepper and delivery will be arranged through designated warehouses at Kochi.
This is for the first time that MG1 grade is being traded in spot business on-line. The quality specification for the grade is fixed as 11 per cent moisture, 2 per cent light berries and 0.5 per cent extraneous matter. A minimum of 1 tonne can be traded in spot business.
Meanwhile, the exporters, the main buyers, have given a mixed response to the new spot trading medium. A section of exporters welcomed the trading as this would ensure good quality pepper for exports. But, a number of exporters have several apprehensions on the quality of the spice. Jojan Malayil, vice chairman, All India Spices Exporters Forum (AISEF) said the quality specification is rather outdated as world over only ASTA grade pepper is accepted and preferred.
The major problem is that the pepper should be re-processed for exports. This will be just like buying farm grade pepper and processing for enhancing the quality standard to ASTA level. The beginning of the spot trading is rather un-timely as world over demand for pepper is squeezing on account of global economic recession, he added.
Meanwhile, Vietnam has slightly increased the price tags as there is strong resistance from growers to sell at much cheaper prices. The country has enhanced the price tags to $ 1800 per tonne for 500 GL, 1950 for 550 GL and 2080 for ASTA grade pepper. Indonesia still offers pepper at 2050 for March to June period while Brazil’s tag is almost on a par with India, at $2,150-2,200. The Indian offer is $2,200-2,225 and hardly has any overseas business.
At this moment the contract is aimed at black pepper producers of Kerala and Karnataka would be included later. The contract would benefit all spice-growing farmers of the region, processors, consumers and exporters; especially those located in the vicinity of Kochi — the traditional hub for black pepper.
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