FMC to tackle commodity quality issues

The Forward Markets Commission (FMC) is expected to sort out issues related to open position limits, the quality and delivery of cumin seed (jeera) and pepper in the next few days, said Chairman B C Khatua on the sidelines of the stakeholders' meeting on Friday.

Recently, cumin seed and pepper traders had complained about sub-standard quality and prolonged delivery delays. But, according to participants, nothing tangible has happened. Chilli and guar also invited quality and delivery complaints.

Replying to queries of members and hedgers relating to poor quality in deliveries and inadequate warehousing facilities, the FMC said it was planning to meet warehouse representatives in the future. Participants also expressed the need for contracts of longer duration in some commodities.

The other issues which a majority of participants raised related to lower position limits. The FMC had in an order to curb excessive speculation reduced the position limits for many commodities.

According to participants, this has resulted in low levels of liquidity and lack of interest among traders. The FMC promised to examine the issue.

In his opening remarks, Khatua said the FMC would like to have a balanced market in which all stakeholders play their economic role for the efficient functioning of the market. For this, the regulator was committed to look into all issues confronting the interests of hedgers.

Khatua underlined the importance of hedgers and their role in price discovery for future months. The efficacy of the futures markets would be judged by the level of participation of hedgers, be it producers or users like manufacturers, exporters etc, he added.

The meeting, the first of its kind, was convened to gather the views of all stakeholders who play a pivotal role in the smooth functioning of the commodity futures.