Kochi is set to spring back to the centre of the Rs. 1,000-crore pepper business in the country with the Forward Markets Commission (FMC) permitting the city-based India Pepper and Spice Trade Association (Ipsta) to re-launch futures trading.
FMC is the chief regulator of forwards and futures markets in India, and Ipsta, with100 members and 140 non-member clients, represents the swelling pepper business in the country.
Futures trading in pepper, an iconic product of Kochi, was suspended in December last year after Food Safety and Standards Authority of India seized 8,000 tonnes of pepper reportedly for the presence of mineral oil, which is used to polish bad quality produce.
FMC order on May 15 to the Ipsta president permitted it to resume futures till December. Ipsta’s performance in conducting trading will be evaluated after December. For now, Kochi’s credentials as the futures trading hub for pepper stands to be tested, said Jojan Malayil, former president of Ipsta and a veteran in the business. Over the last six months Ipsta, which is nearly 60 years old, and the Spices Board have been trying to convince the regulator that the quality issue could be addressed.