Sham Nair: M&M Disturbs Indian Pepper Trade

Kochi/Mumbai/New Delhi /10/ 01 2012 02 HRS IST

Muscle and Money Power play by non Pepper operators since last Nine months is disturbing the Indian pepper trade according to cross sections of the trade from various parts of the country.
Mr Lukose Mathew of Kottarakara a leading collector from various farmers said that he is getting out of the pepper business which he was doing since last 30 years as he cannot afford to loose any more as the recent volatility created by non pepper operators are forcing traditional pepper players like him to exit the Business. We have to buy every day whatever the farmers bring and it will take two weeks to collect 3mt or 5 mt quantity and currently in three trading working days the futures market is pushed down by Rs25/- Rs 30/- kg making it impossible for me to turn around the stocks as once the futures drop the exporters completely withdraw and doesn't even quote any prices still the market stabilises and they even don't buy when the market moves up drastically.

The current scenario in India is ,from 65 exporters in the 1980's the number has shrunk to very few whom you can count down finger tips and they are all very seasoned and none of them play short and doesn't get excited when the market goes down or up and doesn't care what the speculative groups do. According to a senior Manager of a multinational company the excessive speculations are happening with the blessings of the exchange authorities and the toothless watchdog with blind eyes.

Its high time the Government of India brings the commodities also under the securities watch dog SEBI which is performing a wonderful job in this country and shut down the commodities watch dog Forward Market Commission.

Mr Kunal Shah a trader from Nagpur said he is trying to keep away from spices in which futures Gambling Licence is given in India.
When there is a free flow of the spice the prices are pushed up unnecessarily and when its supply is tight the futures are pushed down drastically and certain times even Rs 20/- 30/ Kg than in tandem price discovered by special experts of spot raw pepper sitting in the alley of old spice market Jew Town in Cochin.Some of the experts say its Circular trading happening in the exchange by a group who has cornered the commodity and some others say its the exchange itself playing the market up and down and triggering stop losses to show the inflated turnovers in the exchange.

The India Pepper and Spice Trade Association the pioneers in the futures trade of Pepper for fifty years conducted it very beautifully and systematically and the exchange itself had the tools in hand to control money and muscle play but with the entry of national exchanges it got buried and has become a part of the history due to the vested interests of a very few orthodox traders.

The traditional small, medium and large pepper traders have lost interest in the system and is keeping away from the activities of the unregulated futures trade in the country where Muscle and Money are in play with the blessings of the exchange and its watchdog.

Meanwhile in the last 16 days future delivery prices of January contracts have fell by Rs 56/-kg and the in tandem discovered price of raw pepper by Rs 38/-kg and the cheapest origin of Black pepper in the world India has become more cheap but the expected volumes are not happening is one thing which has to be investigated in detail as the manipulators/operators are playing with 5000 mt of spot pepper which is not even the volumes of 2 major exporters in a month from Vietnam and which can suddenly change hands to smart exporters there by putting an end to the power play.

Some Biz was done to North America on Friday and Monday with prices becoming very attractive for January and February shipments in the usd 2.95/-3.05/lb range and more buying interest is seen at usd 2.90/lb range for February shipments by Giant buyers who may runaway if the Indian futures market is lowered further in the coming days.