NCDEX to meet jeera traders, sort out delivery issues

Mumbai, May 28 | Updated: May 29 2007, 05:30am hrs
NCDEX has decided to meet Unjha-based jeera (cuminseed) traders on Tuesday to review the situation related to the delivery specification issue of jeera trading. A team of exchange comprises a representative of product knowledge committee, warehouse service providers and quality surveyors.

We are meeting the jeera traders and members of the exchange in Unjha on Tuesday to review the situation related to delivery aspect in the futures trade, an official with NCDEX told FE.

As per the market information, traders alleged that delivery of goods was not accepted by the warehouse service providers appointed by the exchange in Unjha (a major centre for jeera in the country). This happened at a time when the prices reached the peak recently and samples of goods were rejected randomly without any valid reason.

On Friday, the delivery issue blew up when the 12 committee members of 16 Jeera Product Committee resigned alleging that the exchange has rejected about 90% of the goods for demat. As of now, we have not received any documents regarding resignation of the committee members in Unjha and other centres. The exchange officials are in constant touch with the Product Committee members regarding their concerns about Jeera trading, exchange sources said.

Traders expect about 1,600 tonne of physical deliveries in Jeera May 2007 contracts which expired on May 20.

The exchange has total stocks of 6,249 tonne including 3,552 tonne in Unjha and 2,697 tonne in Jodhpur centre.

Pravin Patel, president of Unjha Futures Commodity Association said, We have three major issues with the exchange change in margins, change in open positions and quality issue.

The exchange had recently revised contract specification in consultation with the Jeera Product Committee the contract specifications. The exchange reduced the market open positions from 600 tonne to 120 tonne for members and 200 to 40 tonne for clients. The exchange also increased trading margins to 27% for near months from 6%.

Recent revision of position limits and margins in Jeera have been imposed by FMC as a regulatory measure and are applicable to all the commodity exchanges and not only to NCDEX, exchange officials said.

They also said that the exchange does not change any contract specifications in any running contract. Changes, where required, are ascertained by discussions with the market participants and put up to the Product Committee of the concerned product.

After the approval of the committee, the approval of the regulators are sought and only on receipt of their approval, the changes are made effective after giving sufficient notice to the market participants by means of a circular, they added.