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May 21, 2007 11:33 IST
The higher margins imposed on pepper in the wake of volatiluity in the commodity's prices by the Forward Markets Commission is likely to reduced soon.
India's national commodity exchanges had had imposed on April 20 higher margins on pepper on directions from FMC, the apex commodities regulator in India.
The National Commodity and Derivatives Exchange of India Ltd and the Multi Commodity Exchange of India Ltd had raised the margin to 25 per cent of the amount when a trader buys pepper and 20 per cent when he sells, from a flat rate of 11 per cent and 9.5 per cent, respectively.
Pepper prices are now rising and exports are bound to go up because of a global supply crunch. Therefore, the exchanges have come out with decisions to reduce the open position from 15 June for the next month's contract (July) to 1,500 tonnes for members and 500 tonnes for every client from the present level of 3,000 tonnes and 1,000 tonnes respectively.
Officials said this will mean that a broking house member can hold a position of 1,500 tonnes at any given time in the contract.
Clients who might be dealing through several member broking houses would be allowed to take a position of just 500 tonnes.
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