IPSTA Begins Online Pepper Trading

First Participant Offers 3 Tonnes as Platform Gains Traction

The India Pepper & Spices Trade Association (IPSTA) launched its online spot trading platform for pepper on Friday. Anand Kishor, IPSTA president, announced that one participant offered 3 tonnes for delivery on the e-auction platform. As more participants join, the exchange expects to trade 20,000 to 30,000 tonnes of black pepper annually. Kishor Shamji, IPSTA director, emphasized that online spot trading would help farmers, buyers, and traders understand the daily market dynamics and ensure better price discovery. Previously, trading was conducted for future deliveries under a license from the Forward Market Commission.

Ensuring Quality and Fair Trading

Warehousing and Testing for Reliable Pepper Trade

Pepper can be stored in approved warehouses, where it will be tested for quality by an accredited agency. The warehouse will forward the test and warehouse receipts to IPSTA, which will then upload the lots for trade. Sellers will set a reserve price that remains undisclosed to buyers, ensuring only offers above this price are accepted. Trading time is currently set at five minutes, and if a lot isn't traded within this time, buyers can negotiate directly with sellers offline and report the trade to IPSTA.

Provisions for Sellers and Future Prospects

Spot Trading Expected to Grow with Regional Outreach

Sellers have the option to offer their lot from their approved warehouse if it meets the required specifications. A 10 percent margin must be paid to IPSTA to safeguard the delivery. The association charges a nominal fee, shared with software providers. Approximately 50 members and non-members have registered with the exchange. Spot trading is expected to gain momentum as roadshows in Wayanad and Kodagu have already been conducted, with more events planned for Idukki.

The launch of IPSTA's online pepper trading platform marks a significant step towards transparency and support for farmers and traders. The initiative aims to facilitate better price discovery and enhance market dynamics through robust quality assurance and regional outreach efforts.