A section of pepper traders has sought the intervention of the Forward Markets Commission (FMC) to check manipulation of the futures market by some cartels. They alleged that a situation has emerged making it difficult for some hedgers to deliver/ deposit pepper against sales on the exchange platform.
In a letter to FMC Chairman Kishor Shamji, an exporter/processor and former President, India Pepper and Spice Trade Association (IPSTA), said that the “prices were held high by commodity price manipulating cartels who are distorting the pepper trade in general”.
He said the goods deposited on October 29 by some have not come to their account yet.
Traders alleged that “with money power and inside influence depositing goods was being delayed. In fact, the depositing time at our disposal is limited because of Diwali holidays next week and weekend holidays, which has reduced the number of days for depositing the pepper against sales by the genuine hedgers”, he said.
Meanwhile, the Hill Produce Merchants Association said that some big commodity operators have entered pepper trade since December 2011 and with their money power they are manipulating the prices on the exchange platform creating high volatility in the prices. They are cornering and squeezing the market with their muscle power. These cartels have already acquired more than 5,000 tonnes of physical pepper into their hands by investing nearly Rs 250 crore, it alleged.
Due to the monopoly, Indian pepper has become uncompetitive in the world market by more than $2,000 a tonne. Also almost all domestic traders in pepper are keeping away from the market while end users cover their requirements hand to mouth with bare minimum inventories because of the high prices speculatively pushed up by these market manipulating cartels.
“We as exporters and processors both give and take delivery on the exchange platform quiet regularly and also believe that there should be no quality compromise whatsoever with regard to contract specification but this time we feel these measures are being taken simply to make sure the goods are not deposited in time for November contract”, they added.