Pepper hits lower limit on govt panel report

MUMBAI: Indian pepper futures hit the final lower limit on Wednesday after a parliamentary panel suggested curbs on futures trading in agriculture commodities and on sluggish export demand, analysts said.

All the contracts hit the daily 4 percent lower price limit. "The report has forced the traders to sell their positions," said an analyst with Motilal Oswal Commodities Broker Pvt Ltd.

The parliamentary committee said in a report India should discourage futures trading in agriculture commodities to contain speculative trading, resulting in an artificial rise in prices. India suspended futures trading in four agriculture commodities, soyoil, chana, rubber and potato, for four months in May for their alleged role in stoking inflation.

Futures trading in rice, wheat, urad and tur was also banned in early 2007 for the same reason. However, India has no plans to curb futures trading in more commodities and is likely to lift a ban on four items in September, the market regulator said after market hours on Wednesday.

Sluggish export demand due to arrivals in Indonesia and Brazil also hurt the sentiment, said Faiyaz Hudani, an analyst with Kotak Commodity Services Ltd. Arrivals in Indonesia and Brazil, two of the largest exporters, started in July.

Open interest for September contract fell to 7,412 tonnes from 8,019 tonnes the previous session. Spot pepper fell 1.3 percent to 14,553 rupees per 100 kg in spices hub of Kochi in Kerala.