Industry players welcome relaunch of NCDEX Black Pepper Futures, demand strict regulations

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Industry stakeholders have largely welcomed NCDEX Ltd’s decision to relaunch Black Pepper Futures, which the SEBI-regulated bourse expects to revive the “price mechanism that has been missing in Indian commodity markets for over a decade”. Traders and growers emphasize the pricing angle of the mechanism, even as they raise the need for proper checks and balances.

NCDEX recently announced that the black pepper futures contract will start trading from July 15 with Kochi designated as the delivery and pricing centre. Initially, four contracts will be available for trading, expiring in August, September, October and November.

The exchange is making a comeback after suspending the black pepper futures contract in 2010 following serious quality disputes. SEBI gave its nod to renew the contract, reportedly after litigation, trading freezes and legal hurdles that spanned more than a decade.

SV Prabhakar, a spice grower from Idukki, welcomed the return of the contract, saying it provides a hedging mechanism to protect traders from adverse price fluctuations. However, he pointed out that the trade unit – 1 metric ton – set by the exchange may not be practical for manufacturers. “It should be reduced to 200-250 kg. The contract may remain a non-starter if they insist on 1,000 kg,” Mr. Prabhakar said.

Anil Kuruvila, Professor and Head, Department of Agricultural Economics, College of Agriculture, Vellayani also welcomed the deal, saying it will help domestic players in pricing without depending on external markets, including Vietnam, the world leader in pepper production.

Meanwhile, Anand Kishor, president of the India Pepper and Spice Trade Association, warned that relaunching the contract should take into account lessons learned from the past. He said there are cases where multi-commodity exchanges have allowed speculators to run rampant and maintain large volumes. “The basis of the commodity exchange market is a price discovery mechanism, not a price distortion. We urge SEBI to ensure that the re-introduction of pepper futures should be in a controlled manner and there should be strict checks and balances. They should ensure that everything is done in an equitable manner,” he said. He also emphasized that SEBI approved quality assessors should manage the entire delivery ecosystem including the warehouse.

Arun Raste, Managing Director and CEO, NCDEX, said the re-launch of Black Pepper Futures is an effort to bring this benchmark home and create a transparent, credible and India-centric reference price for trade.

Published – 10 Jul 2026 21:33 IST