FMC checking quality specification of agri-futures contract

Commodity market regulator FMC is examining the quality of farm commodities offered for trading on commodity bourses, and is also looking into the feasibility of adopting standard food safety measures for the traded agri-contracts.

Commodity market regulator FMC is examining the quality of farm commodities offered for trading on commodity bourses, and is also looking into the feasibility of adopting standard food safety measures for the traded agri-contracts. The decision comes in the backdrop of Food Safety and Standards Authority sealing six NCDEX-accrediated warehouses in Kerala last month following complaints of adulteration of black pepper stocks.

"We are examining the quality specification of futures contracts of agriculture commodities. We are also exploring the feasibility of incorporating standards formulated by Food Safety Authority, Bureau of Indian Standard and Agmark," FMC Chairman Ramesh Abhishek has said.

On the sealing of warehouses, he said the FMC has asked NCDEX to take up the matter with the state government and food safety authority for early resolution. Earlier this week, NCDEX had said it will resolve the issue at the earliest as per the exchange's regulations. "We will resolve the issue at the earliest as per our existing regulations," NCDEX CEO and Managing Director R Ramaseshan had said when asked about seizure of its six commodity warehouses in Kerala by the Food Safety authority and consequently the delivery defaults of the commodity.

Meanwhile, Food Safety Authority has asked state-run Spices Board to examine the samples of the black pepper. Commissioner Food Safety (Kerala) Biju Prabhakar had said that the authority has issued notice to NCDEX to ensure that stock does not enter the market. The stock in the warehouses was about 8,000 tonnes.

"With one or two samples, we cannot declare the entire stock as adulterated because the commodity belongs to small and medium farmers. We need to examine carefully," Prabhakar had said. With seizure of six warehouses in Kerala, black pepper traders of NCDEX have made representation to commodity market regulator FMC and also to the exchange demanding delivery of valid goods or refund the value of the pepper, estimated to be about Rs 300 crore.