IPSTA president Kishor Shamji said the association had been in futures trade for the last 43 years. Futures trade was an accepted mechanism for `price discovery, hedging and risk management' and farmers and traders should take advantage of the facilities offered, he added.

The functioning of the exchange was in a `transparent and democratic' manner. The exchange was only a facilitator of trade and its stand was neutral, he added.Wayanad-based Haritha Sena had charged the exchange with exploiting farmers.

It said that it was not possible for any one individual or group to control the price or trade for vested interests. It also blamed the exchange for low prices.

Mr Ajay Agarwal of IPSTA said the charges were baseless. There were 150 members in the exchange and 50 of them were active. There were also farmer members in the exchange. The activities of the exchange were regulated and scrutinised by the Forward Markets Commission (FMC) on a day-to-day basis. One-third of the members on the board were nominated by the government.

Mr KV Thomas, a government nominee on the board, said futures trading was the most advanced system in the world and would give the farmers just returns. It was important that farmers understood the nuances of the system and traded according to the market trend so that thye could draw the best mileage.

Regarding the appreciation of prices, Mr Shamji said there was a bumper crop in Indonesia which led to a crash in prices. Indonesia even went to the extent of selling white pepper at a price lower than that of black pepper though there would be at least 25-30 per cent extra cost of value-addition for converting black pepper to white. This trend was demonstrated in the futures prices. And over the last three years prices were ruling high, giving the farmer here the advantage. With the farmers making a windfall, they are now in a better position to hold back their stock in anticipation of higher prices. There is better storage facility and so their holding capacity has been enhanced. Had they sold their stock in the middle of last year when the prices were ruling high, they could have got better prices.

Around 5,000 tonnes was imported as the commoditiy was not avialble in the market. Exporters have their obligations to meet. IPSTA cannot be blamed for farmers holding back thier stock and losing out now, he added.

Vietnam, realising the benefits of pepper trade, had planted pepper vines five years ago and its production is expected to touch at least 50,000 tonnes this year. Production in Indonesia was thrice that of India. However, in India, there is no scientific method to assess production.

Domestic consumption takes a good chunk of the production. Nearly 35,000 tonnes is consumed domestically. Last year the production was estimated at 68,000 tonnes. Of this 30,000 tonnes was consumed domestically and 23,000 tonnes was exported of which 5,000 tonnes was imported and re-exported. This shows that nearly 20,000 tonnes did not reach the market. It has been held back by producers. But the bumper crop elsewhere in the world had brought down the prices forcing the producers to hold back their stock. IPSTA cannot be blamed for this, he added. Mr Shamji said the prices and the quantity traded is disseminated to all through the media. And the futures prices traded at the exchange are true reflections based on the demand-supply factors in all the producing and consuming countries.