Jeera traders want position limits, margins restored

Jeera traders in Unjha, Gujarat, have decided to approach the Forward Markets Commission to restore position limits and margins on jeera futures to curb volatility in prices, according to a senior official of National Commodity and Derivatives Exchange.

"The traders and Jeera Product Committee will meet again in a fortnight to consider position limits and margins and submit the proposal to the regulator to restore margins and position limits," said Shrikant Subbarayan, chief business officer, NCDEX.

The decision was taken at a meeting held between NCDEX officials, Jeera Product Committee, and jeera traders in Unjha on Wednesday to resolve the quality issues raised by the exchange and accept the delivery of jeera at exchange-accredited warehouses.

"It was the general opinion of the participants that hedgers and stockists of jeera were forced to offload the commodity due to a hefty reduction in position limits by the regulator," Subbarayan said.

On May 9, FMC had reduced the near-month position limits on jeera to 120 tonnes for members and 40 tonnes for clients. FMC also halved position limits for pepper to 1,500 tonnes for members and 500 tonnes for clients. Similarly, near-month limits on pepper were reduced to 300 tonnes and to 100 tonnes for members and clients, respectively.

The revised limits will be applicable from June 16 for contracts expiring in July and onwards. Traders have been alleging that this led to shift of jeera trade from the hands of actual stakeholders to speculators, Subbarayan said.

It may be noted that a similar meeting was held in Kochi last week where pepper traders asked FMC to cut margins and increase position limits to protect stakeholders from incurring losses occurring due to the regulator's restrictions.