Workshop To Be Held On World Pepper Futures Contract

Various features of the proposed international pepper futures contract to be introduced here will be dealt with at a workshop on July 7-8.

Jointly organised by the Spices Board, the Forward Markets Commission and the India Pepper and Spice Trade Association (IPSTA) in association with the International Pepper Community in Jakarta, the workshop is a prelude to the launching of the international pepper futures contract in the country.

The workshop will include familiarisation with the working of the international pepper exchange in Cochin besides other related issues aimed at educating pepper growers, trade operators, processors, banks and financial institutions with membership categories, and procedure for enrollment as members in the international commodity exchange division.

 

Organisational aspects and functions of IPSTA and First Commodities Clearing Corpor-ation of India Ltd, which has been incorporated as a separate public limited company to register, clear and guarantee the contracts traded in the exchange will also be dealt with at the seminar.

Sharp price fluctuations have created difficulties to pepper traders as well as farmers. The international pepper community has considered initiatives to reduce the fluctuations in pepper prices through production agreement, export retention schemes and minimum export price.

However, these measures have not provided the desired results. It is in this context that the IPC has agreed to promote the international pepper futures contract as a price discovery mechanism.

The international futures contract is a market-oriented, risk management commodity derivative which will provide hedging support to enable exporters to accept distant delivery contracts and to the farmers to lock in the prices.