Last Updated : 21 January 2013 at 19:25 IST
KOCHI(Commodity Online): In a bid to address the issues across the value chain in pepper and cardamom, Ministry of Food and Public Distribution, in consultation with the Kerala government will constitute a Committee to study the problems, said Minister K.V. Thomas in a stakeholder's meet in Kochi.
The meet was organised by the FMC or Forwards Market Commission, India's commodity market regulator in association with NMCE, NCDEX and MCX, three national-level exchanges.
Addressing the stakeholders in pepper, cardamom and rubber—commodities that are important to Kerala-- the Minister said that when it comes to the quality issues in pepper, “FMC will take care of the issues.”
While he ruled out any compromise when it come to quality, some “re-checking” would be requested to be carried out to the State's Food Safety Authority.
Recently, the FSA inspectors had sealed the pepper warehouses of NCDEX citing contamination issues arising out of mineral oil.
Some of those who had delivered pepper—mostly aggregators-- to the warehouses not only had their stocks tethered to the warehouses, but also were penalised for contamination without any discretion.
Though the penalty for certain players were revoked later on , the warehouses remain sealed and pepper stuck in the pipeline.
“I cannot go back to my home town as farmers who delivered pepper to me in trust would not even let me.” said an emotional stakeholder who spoke to the gathering.
Given that the stocks are sealed until contamination tests would be carried out in 8000 tons of pepper, chances are more that the process would take a chunk of time.
At current minimum spot prices of Rs.370, the pepper entrenched in the NCDEX warehouses would attract Rs.296 crore rupees.
'Position limits monitored'
Admitting that cartel manipulation exists and “there is nothing new to it”, FMC Chairman Ramesh Abhishek said that position limits are strictly being monitored and clients having similarities, be it with phone numbers or addresses are being made answerable in this regard. No duplicate accounts are thus entertained.
To this end, the exchanges are given open mandate and the “FMC has not laid out any parameters” in identifying similar client accounts; otherwise those parameters too would be evaded, he said.
“The government does not want to protect any cartels, neither it would spare any of them who are trying to manipulate markets.” Chairman said.
He also said speculation outstrips hedging in commodity markets and the markets need to be strengthened in this regard. He said that staggered delivery mechanism has done much to bring down speculation in near-month contracts.
Guar futures to be re-introduced?
Guar futures, meanwhile may be re-introduced in a few weeks time depending on the issues at stake, he said.
The information dissemination system through mobile phones on the status of the accounts of clients would cover 100% of the client fraternity, he said.
Also Minister K.V. Thomas addressing the gathering said that the FCRA bill would be the first item to be taken into consideration by Parliament in the coming session.
The bill is expected to add new set of teeth to the FMC, India's commodity market regulator.
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