The National Commodity & Derivatives Exchange (NCDEX) has issued a clarification saying 62 per cent of the total stock to the exchange-registered warehouses in Unjha, Gujarat, matched up to its quality standards after concerns were raised over the dispatch of sub-standard jeera by traders.
Citing incessant rainfall as the reason behind poor quality jeera, traders feared the delivery of sub-standard jeera stock in several warehouses.
Anticipating problems in the delivery and availability of the product, jeera prices hit a lifetime high in the benchmark spot Unjha market to trade at Rs 19,623 a quintal on July 31. This was, however, followed by a marginal decline in jeera prices to Rs 19,236 a quintal on Friday amid high volatility.
The exchange said that traders in the value chain tendered 2,347 tonnes of jeera for delivery in Unjha warehouses, of which around 1,471 tonnes were found to be in line with NCDEX's quality standard. Hence, the exchange accepted deposits of 1,471 tonnes of jeera in the warehouses registered with it since early August.
The harvest season for Jeera ends in April and sowing starts in October. Peak arrivals in the physical market gradually tapers off during August and September.
NCDEX said that the exchange has facilitated the availability of 3,670 tonnes of warehousing capacity for traders in Unjha markets and this, it says, would be more than enough to meet the needs of prospective depositors. For traders to avail this facility, the exchange has provided online warehouse reservation system to book space for deposits in a fair and transparent manner.
To address concerns over crop quality, NCDEX provides a unique facility to each buyer enabling them to opt for assaying at the time of withdrawal of stocks that they have received through the exchange settlement system. Recipients, who would want to avail the opportunity, will have to exercise the option before the exchange delivery date (EDD) of the specific lot. The exchange subsequently makes sure that the warehouse service provider (WSP) compensates the buyer, in case there are any deficiencies in quality.