Jeera exporters seek FMC action on delivery default
Jeera exporters have urged market regulator Forward Markets Commission (FMC) to immediately resolve the delivery default issues in jeera contracts trading on the leading agri-commodity exchange NCDEX.
By PTI |
NEW DELHI : Jeera exporters have urged market regulator Forward Markets Commission (FMC) to immediately resolve the delivery default issues in jeera contracts trading on the leading agri-commodity exchange NCDEX.
In a letter to FMC last week, traders had complained of delivery defaults, as sellers can exit the market by paying 2.5% of the traded contract amount as penalty. It sought either hike in penalty up to 25% on sellers or ensure 100% delivery of the commodity.
���We request FMC to act fast, so that issues regarding delivery defaults are resolved quickly,��� said a Mumbai-based exporter N Ashok.
���Early solution would help in increasing participation in the futures market as futures prices are ruling at discount by 4-5% compared to spot market,��� he said. FMC chairman BC Khatua had assured last week that it was working on a mechanism to tighten the system.
Pointing that defaults are not very large on exchanges, he said: ���We are tightening the system to ensure healthy trading practices apart from the penalty provision. We are working on other alternatives to penalise defaulters.���
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The country���s top jeera exporter Jabs International managing director Bharat Shah said: ���Besides price discovery platform, an exchange is also a risk-hedging platform for genuine exporters. Unfortunately NCDEX has converted it into a playground for speculators without ensuring deliveries of compulsory delivery contracts.��� An exporter, who has hedged sales by buying jeera on the exchange with a view to take delivery of the commodity is not able to get the delivery as the fake seller escapes from his responsibility by paying a nominal amount as penalty, he said.
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