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The Forward Markets Commission (FMC), the commodity derivatives market regulator, has approved the re-launch of pepper contracts with mineral oil testing.
In a contract specification approved for the launch of pepper contracts at the India Pepper and Spice Trade Association, the Kochi-based commodity futures trading platform incorporated the clause that pepper traded on the exchange platform should be "free from oil wash".
Though the regional exchange has abstained from the commodity traded with oil (mineral oil) wash, national commodity exchanges, including the National Commodity & Derivatives Exchange (NCDEX), had no such mention in its contract specification, resulting in all types traded on this platform.
According to sources, the FMC would mention the clause of "free from oil wash" on contract specifications of all exchanges before its final approval.
Leading agri-centric commodity exchanges, including Ace Derivatives & Commodity Exchange (Ace), NCDEX and Universal Commodity Exchange, have applied for pepper contract approval.
Futures trading in pepper was discontinued temporarily on findings of mineral oil traces in the deposits on NCDEX-registered warehouses early this year. The FMC approved commencement of futures trading in pepper MG-1 contracts for delivery between July and December.
