The Kerala unit of the Food Safety and Standards Authority of India (FSSAI) has sealed the entire quantity of pepper stored in six warehouses at Kochi, Kerala, about 5,000 tonnes worth Rs 18 crore, after saying it found traces of mineral oil in the stock. The warehouses were accredited by the National Commodity & Derivatives Exchange (NCDEX).
FSSAI acted on complaints by a couple of participants in the exchanges. Said an FSSAI official from Kochi, “We have sent the sample of pepper to the laboratory and the report is awaited. We have asked the warehouse keepers not to engage in any trading without our permission.” Chillies and other spices stocked in these godowns have also been blocked for delivery.
Used to improve pepper’s appearance, mineral oil’s use here is prohibited globally. Tasteless and odourless, it is used in baby lotions, cold creams, ointments and cosmetics. Following the global norm, the Indian government has prohibited its use in food articles.
However, a clause prohibiting use of mineral oil was not mentioned in the contract specification designed by the exchange and approved by the commodity derivatives market regulator, the Forward Markets Commission (FMC). It was assumed the global norm would be obeyed. Though most export specifications specifically mention ‘free from oil wash’, the local specifications usually do not.
“The exchange has sent its officials to look into the matter. We are in touch with FSSAI for further course of action,” said an NCDEX official.
Late last month, FMC investigated the issue on complaints by a Mumbai–based commodity manufacturer and trader. Its officials inspected and found the pepper stored in these warehouses conforming to the quality specified in the contract specification. Hence, the regulator gave a clean chit.
An FMC official said, “The complaint lodged with us was primarily with regard to high moisture content and light berries in the product. We found no truth in this complaint. Apparently, the complainant is sitting with high stocks, which it bought at very high prices. Since, the price has crashed since then, the complainant is furious.”
Pepper prices have fallen around 15 per cent in the past three months, to trade at Rs 35,450 a quintal today for delivery in February 2013 on the NCDEX, from Rs 41,500 a qtl on September 20.
Ramesh Abhishek, the chairman of FMC, said, “The mineral oil issue has been raised for the first time. We would look into all standards set by various agencies, including FSSAI and other statutory bodies, and take a view soon.”
Traders fear no delivery of pepper on the NCDEX platform, as the exchange does not have any in any other warehouse.