The Central Warehousing Corporation (CWC), also in the dock is considering to convene a meeting of buyers, sellers and the exchange, according to a top official.
FMC chairman, S Sunderashan said that the regulator had received complaints of quality and delay in getting warehouse receipts and was taking up the matter seriously. If there were quality issues, the usual course of arbitrage or penalty would be followed, he added.
When the contract ended on July 15, there was little material at the CWC, forcing the exchange to extend the delivery time to July 17 and then to July 19. Material was collected at the warehouse in Bangalore after July 15, though CWC did not issue receipts stating that the material did not meet the exchange standards. Samples were later taken to Coffee Board and CWC receipts issued some of which had does not confirm to NMCE of robusta cherry AB scratched out and replaced with quality confirms to robusta cherry AB as per ICB (Indian Coffee Board) standards.
The board had also clarified that the material was inspected only for grading and garbling and not bleached grain and moisture, which was above the board standard.
NMCE managing director Kailash Gupta said that the exchange standards were those of ICB. He said the date and timing of the physical delivery had some minor fine tunings, since it was the first time that the delivery was being done. If buyers failed to take delivery of the warehouse receipts from the clearing house, they would be auctioned. The exchange convened a meeting in Bangalore on July 29, attended by 14 people representing buyers, sellers, broking firms and the CWC. According to Mr Gupta, warehouses were not clear or geared up to unload, weigh and analyse the coffee for the exchange delivery, being done for the first time.