The Centre will set up two expert panels to look into the problems of futures market in pepper and cardamom and put in place an effective mechanism to ensure the quality of products traded, Prof. K V Thomas, Union Minister of State for Consumer Affairs, Food and Public Distribution, said. He said so at the meeting organized by Forward Markets Commission (FMC) at Kochi.
Issues in pepper market has aggravated in recent past following actions by Kochi office of the Food Safety and Standard Authority (FSSAI).
The expert panels being will look into the problem of production of pepper and cardamom, and also recommend solutions to address concerns of various stakeholders in the trading of these spices.
Around 8,000 tonnes of pepper stored in six NCDEX registered warehouses in Kochi was sealed by the FSSAI on December 18 with traces of mineral oils–a banned chemical for use in commodity. Traders use mineral oil for polishing to hide the commodity’s poor quality.
According to Biju Prabhakar, FSSAI Commissioner based in Thiruvanantpuram, Spices Board has agreed to get the sample tested with Rs 500 each provided the samples are delivered to its office with an accumulative cost of Rs 12 lakh.
“We do not have facility to test bulk samples and hence, we have written to NCDEX to bear the cost. Since, Spices Board has also agreed to request NCDEX for bearing this expenditure, the exchange must come forward to help early resolution of this issue,” Prabhakar said.
In case, NCDEX does not agree to such investment, “we would go at government speed which may take longer time for solving it,” he added. However, the minister assured in market participants while addressing the meeting that this particular issue would also be settled amicably.
According to Prabhakar, neither the Spices Board nor the FMC would apparently be agreed to pay the testing cost. The exchange, being the counter guarantee of smooth trade, should pay it, he added.
“As far as testing cost is concerned, we have not received any such request from FSSAI. On receiving it, the exchange would take a call. Prima facie, the issue is between the FSSAI and the warehouse. Hence, exchange would not bear any cost. Rather, it would prefer the warehouse keeper to pay the testing cost,” an NCDEX official said.
Prabhakar said, if NCDEX agrees to pay, we would resolve the issue within a month. While the non mineral oil stocks would be set free, mineral oil contained quantity would also be looked into, he added. Till the issue is resolved, 8000 tons stock of pepper is frozen and NCDEX will have to help traders to settle the trades on cash settlement basis.
Meanwhile, the FMC has directed commodity exchanges not to launch fresh pepper contract without its prior approval.
