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August 2, 2001 		Feedback  
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Kochi pepper bourse to begin dollar trading

Sanu George in Thiruvananthapuram

Four years after it was set up, the world's first International Pepper Exchange at Kochi, Kerala, is set to commence dollar trading.

Indian Pepper and Spices Trade Association president Kishore Shamji said: "Even though the Reserve Bank of India cleared the dollar denominated trading last September, we had to amend our bylaws and for that we had to go in for detailed discussions and dialogues with other producing countries. Now that the platform has been created, it is for the members to use this."

"The 60 members are now busy applying for a license from the RBI. Each one of them has to open an account and the rates fixed are a deposit of $125 for one ton of business. The maximum a member can get is sanction to trade in 225 tonnes," Shamji said.

Industry sources said the biggest advantage is that this would be a foolproof mechanism beneficial to both buyers and sellers.

"Moreover, the players in this exchange would not be affected by any exchange fluctuation and none can cheat and none would get cheated," said a source.

As 75 per cent of the international pepper business is controlled by just five companies, all of which have their associates in India, the newly set up exchange is expected to do well.

At present, those involved in the business have to get second hand confirmation from other world markets before a deal is settled. "Now that this is over, the exchange is expected to do good business," said Shamji.

With the exchange expected to commence business soon, well in time for the harvest season in Brazil in September, hectic trading can be expected.

Today the price of one ton of pepper is $1,450 in Brazil, $1,650 in Indonesia and $1,800 in India.

Among other advantages of trading in the Kochi exchange is that all the transactions would be fully guaranteed by the First Commodity Corporation of India.

Indo-Asian News Service

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