The Hindu Business Line : Exchanges should have commodity-specific holidays: IPSTA

The national pepper exchanges remained closed on Thursday account of a Central Government holiday while the India Pepper and Spices Trade Association (IPSTA) was open as it wasn’t a holiday in the State besides the commodity was Kerala-specific. Small activities were there and some players were saying “it is an online manipulation as there is no correlation between the fundamentals and the futures market prices.” They said they had lost confidence in the market.

Mr Kishor Shamji, President, IPSTA, told Business Line that exchanges should be given commodity-specific holidays. For instance, in Kerala, the markets (mundies) and the banks were open and “both pepper and rubber are State-specific commodities where deliveries are made, apart from being international market-related.”

Therefore, the futures exchanges, trading in these commodities, should function when the markets here and overseas are open. He said that chilli was Andhra Pradesh-based while Jeera was Gujarat-based. Hence, the regulator needs to look into these aspects while deciding on closing of the exchanges, he said.

The futures prices were not improving in tandem with the fluctuations in the rupee exchange rate against the dollar which is getting stronger.

Given this scenario, people are losing interest and as a result, the turnover is coming down. Market functions on bearish reports of the analysts such as that of an early crop this year etc.

However, now, the weather pundits have said that the second lap of the North-East monsoon would commence in 48 hours and if it happens, the harvesting would be delayed, he pointed.

A similar situation was experienced in 1988-89, he said. According to overseas reports, American traders were quoted as saying that they had covered even for the first quarter of 2009, which, market players here said, is a tactic to pressurise the market.

Availability is limited worldover. Here, some stocks are available with the exchanges. Since ‘badla’ is not available, at present, the investors are engaged in liquidating.

The Indian parity on Thursday was $2,575 a tonne (c&f) Europe and $2,675 a tonne (USA).

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