1. Sebi probing NCDEX coriander seed quality

Sebi probing NCDEX coriander seed quality

Amid complaints about quality of coriander seed futures traded on NCDEX, market regulator Sebi is probing the matter and has taken samples from the exchange-approved warehouses in Rajasthan and Gujarat.

By: | New Delhi | Updated: August 28, 2016 2:19 PM
Some market participants had complained separately to NCDEX, as well as Securities and Exchange Board of India (Sebi) about the inferior quality coriander being deposited at the exchange-approved warehouses. (Source: Reuters) Some market participants had complained separately to NCDEX, as well as Securities and Exchange Board of India (Sebi) about the inferior quality coriander being deposited at the exchange-approved warehouses. (Source: Reuters)

Amid complaints about quality of coriander seed futures traded on NCDEX, market regulator Sebi is probing the matter and has taken samples from the exchange-approved warehouses in Rajasthan and Gujarat.

Some market participants had complained separately to NCDEX, as well as Securities and Exchange Board of India (Sebi) about the inferior quality coriander being deposited at the exchange-approved warehouses.

About 10,413 tonnes of coriander seed have been deposited in the warehouses in Kota, Baran and Ramganjmandi in Rajasthan and Gondal in Gujarat, as per the exchange data.

“Sebi officials are conducting inspection of some of the warehouses approved by the exchange. It is learnt that during the inspection, some samples have been collected by the officials for testing quality,” NCDEX said in a statement.
The exchange said it will take suitable action as may be warranted on receipt of the test results and will adhere to stringent standards in this regard.

Meanwhile, NCDEX is conducting an independent quality audit of the stock deposited in the exchange-approved warehouses and has deployed its officials at various delivery locations to monitor quality of the deposits.

Taking serious note of the complaints, the exchange has already mandated a stringent process for accepting deposits by its empanelled Warehouse Service Providers (WSPs) at the exchange-approved warehouses.

The WSPs have been told to ensure the deposits strictly conform to the exchange contract specifications. The exchange has also put in place suitable controls to ensure the WSPs continually adhere to the norms.

“Above steps and enforcement of stringent testing norms have resulted in rejection of almost 50 per cent of the goods that were brought for deposits,” the exchange had said on August 22.

NCDEX has advised the market participants to check quality of the goods at the time of taking delivery.
Coriander prices in the futures market have stabilised now at around Rs 8,000 per quintal after falling sharply in the last few weeks. Last year, prices had crossed Rs 10,000 per quintal.

  1. V
    Vinay
    Aug 29, 2016 at 8:13 am
    NCDEX conducting audit of warehouses accreditated by itself is an exercise in futility. There is a glaring nexus between NCDEX and the warehouses, with one of the major warehousing chain having invested in the equity of NCDEX. Also some of these wareshouses are being used as conduit to channelise fees for market-making to the brokers appointed by NCDEX. How silly can SEBI get? Earlier it asked NCDEX Board to inquire into the role and involvement of senior management in the Castor seed fiasco, now it expects NCDEX to investigate the complaints of quality disputes. This only reflects incompetence on the part of SEBI. The merger of FMC into SEBI had raised high hopes that the commodities market would not be better regulated, but, alas, the same old warehousing and risk-management scams are recurring under the regulatory umbrella of SEBI..
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