Commodity Online
KOCHI: Pepper exporters will meet officials of the apex commodities regulator, the Forward Markets Commission (FMC) on Friday to demand removal of quantity restrictions in pepper futures delivery.

According to said M L Parekh, Director of All India Spices Exporters Forum (AISEF), exporters will also demand lowering of the margin requirements of pepper during the meeting.

FMC had imposed quantity restrictions on pepper to lessen the speculative activity and reduce the volatility in the commodity’s contracts. The limit was fixed at 100 tonne for the near-month contract and was imposed from the last June contract.

But Parekh says the new rule has only helped speculators and alienated real players from the exchanges.

Saying that 100 tonne is too small a quantity for exporters, he said there is no need for pepper exporters to take part in the futures market if they cannot hedge and take delivery.

He said that FMC could opt for the India Pepper and Spice Trade Association (IPSTA) model, which restricted speculation but gave exemption to genuine players.

“Exporters were given exemption on producing the export contract while the seller had to produce stock receipt verified by a chartered accountant,” Parekh pointed out.

He said during the exporters’ meeting with FMC officials, they will press for the removal of the quantity restriction in delivery to ensure better participation at the exchanges.

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