Spices trade body plans national, global futures

India Pepper and Spices Trade Association (IPSTA), one of the oldest commodity exchanges in the country and the first recognised exchange for pepper in the world with 49 years of operation in its credit, plans to develop itself as a national exchange with a global trading platform.

As part of the initiatives the exchange will commence contract trading in a number of south India-based commodities including natural rubber.

Mahendra L Parekh, president of the exchange, said IPSTA had received permission from the Forwards Market Commission (FMC) to commence trading in rubber a year back. Trading, however, had not yet started owing to financial crunch and the absence of advanced technology.

He said the board had decided to diversify the activities of the exchange since it can not survive as a stand alone regional exchange any longer.

He said the first priority of the exchange is to enhance the reach of its services to the major stakeholders of futures market such as farmers, exporters and traders.

In order to advance on the technological front IPSTA is now in the process of tying up with major technology providers in the country. "Talks are on and we will acquire the proper technology for web-based trading soon", he added.

IPSTA will also commence international futures contract for black pepper within six months. With participation from global growers and traders volume and transparency of trading will substantially increase.

The association, with a total of 187 members of which around 100 are active traders, has a trade volume of a meagre 100 tonne daily.

He also said that IPSTA had launched futures trading in farm grade pepper for the first time in the country.

Marketing of futures trading contracts in farm grade pepper will be further strengthened and will become fully operational in 3-4 months time. Trading in the commodity is a demands exporters and traders as it is difficult to stock MG1 grade in warehouses.

"We want to promte IPSTA as a brand name in commodity futures market as it is the reference market for black pepper in both domestic and global trade," Parekh said.