Pepper prices soar but no decision yet on NCDEX's adulterated stock

KOCHI: With the Food Safety and Standard Authority of India ( FSSAI) finding a significant portion of the tested samples of pepper in NCDEX warehouses in Kerala adulterated, the million dollar questions is what will be done with this contaminated lot.

At stake is 6,800 tonne pepper worth around Rs 350 crore stacked in six warehouses of NCDEX that were sealed by FSSAI in December 2012 on complaints of mineral oil adulteration. "We have tested over 1,000 tonne and found almost 800 tonne of it adulterated," said Biju Prabhakar, FSSAI commissioner in Kerala. He is hoping to complete the testing of full quantity in about 45 days. FSSAI, in consultation with Spices Board, will decide what to do with the contaminated lot.

Prabhakar hinted at destroying the lot as he felt it cannot be used. When contacted, Spices Board chairman A Jayathilak said FSSAI has not communicated with the board on this matter. "We have a role only if the consignment is to be cleared for export. Domestic market regulation is with FSSAI," Jayathilak said.

But traders and exporters may not agree on the idea of destroying the lot. "They have taken over seven months and still haven't been able to test the entire quantity. In case a substantial quantity is found to be adulterated, we would like to have a discussion with all stakeholders before taking any action," said an exporter, whose lot is in the warehouses.

He feels that the contaminated lot can be washed and exported instead of destroying it. NCDEX is yet to launch fresh pepper futures contract since the May 2013 contract came to an end. The bourse may not launch new pepper contracts till the adulteration issue is sorted out. NCDEX sources clarified that they are still in discussion about launching fresh contracts.

Traders say the issue should be settled as early as possible as the country is facing a shortage, particularly in Kerala. The scarcity has driven pepper to 410 a kg in the Kochi market.