Permit cleaning of tainted pepper stocks: NCDEX

Mumbai, Sept 3:  

The National Commodity and Derivatives Exchange has requested the Government authorities to allow market participants to improve the quality of pepper stocks at its six accredited warehouses that were found to contain carcinogenic mineral oil.

Industry players have informed the exchange that farmers and traders adopt various methods to preserve pepper, including by addition of small quantity of mineral oil as a fungicide. Traders routinely use a process of steaming to later remove the mineral oil coating.

Since the traces of mineral oil appear to reflect long-standing industry practice, the exchange has sought the Government intervention in the industry’s interest to give an opportunity to remove the mineral oil coating and improve the quality, said NCDEX in a press release.

Earlier, acting on complaint filed by traders, the Food Safety and Standards Authority of India order for destruction of 93 lots found with mineral oil traces. The Kalimirchi Vyapari Association, which has to receive delivery of 7,000 tonnes worth Rs 300 crore, has filed a writ petition against the exchange in the Madhya Pradesh High Court. The matter is expected to come up for hearing on September 17. In fact, it said, most of the stocks in the six warehouses sealed by the authorities were bought by the holders in the off-market transactions outside the exchange platform.

“The Exchange only provides a trading platform for trading in forward contracts. It does not own, deposit or deal with the goods in the warehouses,” it said. Pradeep Acharya, Vice-President, Kalimirichi Vyapari Association, said the exchange cannot deny responsibility. According to bylaws of the Exchange and as stated by the regulator FMC, the exchange is the counter party to every buyer and seller.