The Hindu Business Line : IPSTA draws up futures plan for chilli, turmeric

THE India Pepper and Spice Trade Association (IPSTA), which has received permission in principle to commence futures trading in chilli and turmeric, is to send a team to Erode and Sangli for coordinating with the traders and studying the production and quality parameters etc.

Mr Kishor Shamji, President, IPSTA, told Business Line on Wednesday that chilli and turmeric traders evinced keen interest. Andhra Pradesh and Karnataka are the major producers of chilli while Erode in Tamil Nadu produces turmeric.

Before commencing the futures in rubber, chilli and turmeric, IPSTA had to amend its bylaws as required by the Forward Markets Commission besides putting in place Internet-based trading facilities, he said. "The new software system bought by the exchange is not a tailor-made one and hence is quite different from the marginal system we have", he said.

Now this has to be changed to suit the association's requirement, he said.

The required de-mutualisation process had already begun and the proposal would be sent to the Union Finance Ministry through the FMC, he said.

As IPSTA is an Action 25 company, engaged in futures trading in pepper, guarantee mechanism for other commodities had to be set up, he said.

IPSTA had earlier set up a guarantee trust fund of Rs 1.5 crore set up for pepper futures.

The FMC had permitted the association to use this guarantee fund for futures trading in rubber also. But, bylaws need to be amended to include other commodities, he said.

Some of the trustees of this fund said there should have to be a "pucca legal opinion" on this issue as it involves amendment of the "Objective Clause" of the Trust Deed. To pave the way for amending the Trust Deed, the IPSTA bylaws need to be amended by an EGM where 95 per cent of the members attending the meeting should support the move to request the Trust to amend the deed, they pointed out.

An emergency general body meeting is scheduled for February 20 to give final touches to the changes to be made in the bylaws. He said the Secretary, Union Ministry of Food Processing Consumer Affairs, Mr Navin P. Chawla, had visited the exchange and gave the nod to go ahead with its proposals as it "had the inherent strength".

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