MUMBAI:
Indian Commodity Exchange Limited (ICEX) has launched redesigned the black pepper futures contract on 20 th May 2019. The change in the contract has been brought upon following extensive consultations with market participants.
New contract would be 550gm/liter weight which confirms to the quality standard produced and consumed in the prevailing market. Black Pepper futures contracts are being re-launched on the ICEX after tweaking with few quality changes, which is now more representative of the existing physical market. This was done after very wide consultation with the physical market participants.
Presently, this contract is not available for trading in any other Exchange in India. The availability of futures trading in black pepper shall fill the need of the stakeholders of the trade. To begin with, three contracts expiring in July , August and September will be available for trading concurrently. The trading lot size and delivery unit of the contract has been pegged at 1 MT with compulsory delivery at Kadavanthra, Ernakulum, the designated delivery location.
Commenting about the re-launch, Sanjit Prasad, MD & CEO, ICEX, said, “Historically black pepper contract is one of the oldest contracts to have been launched in the commodity derivative market. Unfortunately, it has witnessed a chequred history. ICEX after doing an in-depth study of the physical market has consciously decided to re-launch contract based on liter weight- 550 GL rather than location specific characteristics-MG1. The physical market size of Black pepper is about Rs 3000 crores per year. The commodity exhibits extreme price volatility impacting the producer, exporter and importer. Hence, the launch of ICEX Black Pepper Derivatives will be of great economic relevance to the black pepper physical market ecosystem.”
