FMC cuts price limit on pepper to 6%

Forward Markets Commission has directed commodity futures exchanges to reduce daily price limit (maximum allowable price volatility on either side) on cardamom, pepper, and turmeric to 6 per cent from 9 per cent, MCX said today. The change in price limit will be effective from today, the MCX circular said.

"The decision (to reduce daily price limit) has been taken after observing the volatility in prices of these commodities," an FMC official said.

There was talk that following the tightening of regulations for essential commodity futures, big traders with strong financial muscle have shifted their activities to the spices complex. The entire complex has been witnessing a heavy volume amid volatility in last few months.

The turnover in Ncdex pepper contract alone rose over 3,000 per cent to Rs 1200 crore in September from an average of Rs 400-600 crore in the first quarter of 2006-07.

On Sep 25, FMC had reduced the price limit on chilli to 6 per cent from 9 per cent.