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The Forward Markets Commission (FMC), the commodity derivatives market regulator, has for the first time approved the re-launch of pepper contract with mineral oil testing.
In a contract specification approved for the launch of pepper contracts at the India Pepper and Spice Trade Association, the Kochi – based commodity futures trading platform, the FMC incorporated the clause that pepper traded on the exchange platform should be “free from oil wash”.
Although, the regional exchange has abstained from the commodity traded with oil (mineral oil) wash, national commodity
exchanges including the National Commodity & Derivatives Exchange (NCDEX) had no such mention in its contract specification resulting into all types of pepper traded on this platform.
According to informed sources, the FMC would mention the clause of “free from oil wash” on contract specifications of all exchanges before its final approval.
Leading agri centric commodity exchanges including Ace Derivatives & Commodity Exchange (Ace), NCDEX and Universal Commodity Exchange (UCX) have applied for pepper contract approval.
Futures trading in pepper were discontinued temporarily on findings of mineral oil traces in the deposits on NCDEX registered warehouses early this year. The FMC approved commencement of futures trading in Pepper MG-1 contracts for delivery between July and December this year.
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