Chilli contract norms eased

The National Commodity and Derivatives Exchange (NCDEX) has modified its chilli contract for the second time in two weeks to encourage more participation and higher deliveries, according to a exchange circular late on Wednesday.

The revised terms would be applicable for contracts expiring in February and onwards, the exchange said. According to the modified contract, damaged and discoloured pods of chilli would be acceptable up to 6 per cent, compared with 5 per cent earlier, the exchange said.

Damaged and discoloured pods up to 7 per cent would also be allowed for delivery, but with a discount of 1:1 basis, it said.

For example, if the percentage is 6.5 per cent "� 0.5 per cent above the normal 6 per cent "� the buyer then will get the commodity at a discount of 0.5 per cent of his purchase price.

On August 24, the exchange had allowed damaged and discoloured pods of chilli up to 7 per cent compared with 5 per cent earlier for chilli contracts expiring in October and November, with the additional 2 per cent attracting the discount of 1:1 per cent.

It is interesting to note that the chilli stocks in the NCDEX-accredited warehouses have fallen to below 300 tonnes on Tuesday compared with the levels of 15,000-18,000 tonnes during the same period a year ago. The dilution in quality was made on the request of chilli traders so as to enable more participation from traders, according to an official.