IPSTA launches online trading of pepper

India Pepper & Spices Trade Association (IPSTA) on Friday launched the online spot trading of pepper.

Anand Kishor, IPSTA president said one of the participants offered 3 tonnes for delivery in the e-auction platform. More lots will be offered as participants’ on-boarding is increasing day-by-day and the exchange expects 20,000 to 30,000 tonnes of black pepper to be traded annually going forward.

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Kishor Shamji, IPSTA director, said the commencement of online spot trading would support farmers, buyers and traders to know the actual market of pepper of the day and bring more transparency for good price discovery. Earlier, the trading was done for future deliveries wherein IPSTA had a license to conduct futures trading under Forward Market Commission by the act of Parliament.

He said the material can be stored in approved warehouses which will be tested for quality by an approved testing agency. With the certificate, the warehouse will forward the test receipt and warehouse receipt to IPSTA which will upload the lots for trade. The seller will give reserve price to the association which will not be disclosed to the buyer and offers coming above the reserve price will be sold to the buyer.

The trading time given at present is five minutes. If a lot is not traded within the allotted time, the buyers can negotiate with the seller directly and conclude the trade offline and report the same to IPSTA, he said.

Provision for seller

There is also a provision for the seller to offer their lot to his own approved warehouse if it is meeting the required specifications. The seller who is offering his lot from his warehouse has to pay a 10 per cent margin to IPSTA for the safeguard of the delivery.

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IPSTA will be charging a very nominal fee which is being shared with software providers as well. So far, around 50 members and non-members have registered with the exchange, he said.

It is expected that spot trading will pick up in pepper since roadshows were conducted in Wayanad and Kodagu and more such events will be conducted in Idukki.