Sebi collects samples of cottonseed oil cake from warehouses mainly from Rajasthan, Gujarat
National Commodity & Derivatives Exchange Limited (NCDEX) has once again come under the scanner of the capital and commodity market regulator Securities and Exchange Board of India (Sebi).
The regulator has started an investigation of cottonseed oil cake and coriander quality after receiving complaints from the traders' lobby.
Sebi has collected samples of cottonseed oil cake from various warehouses in Rajasthan and Gujarat. This follows complaints from traders that cotton seed oil cake quality is not appropriate and that it is mixed with rice bran.
"We have collected samples of cottonseed oil cake from various warehouses mainly from Rajasthan and Gujarat. We will get the examination report in next few days," Sebi sources said.
A Sebi official told dna, "We will take strict action against of the management and warehouse service provider if the quality is not up to the mark. However, we have to wait till the examination report''.
Cottonseed oil cake is mainly used for animal feed and is a great source of quality nutrition.
In response to an e-mail query, NCDEX said, "Sebi officials are conducting an inspection of some of the warehouses approved by the exchange. It is learnt that during the inspection, some samples have been collected by officials for testing the quality. NCDEX shall take suitable action as may be warranted on receipt of the test results. NCDEX shall adhere to stringent standards in this regard."
NCDEX managing director told dna, "We got a complaint related to coriander mid-July and have checked our product which is intact."
This is the third time that NCDEX faces the fury of the regulator in last one year. In January, castor seed futures were banned due to concerns over a default. Subsequently, chana futures were also banned.
Sebi is also investigating the quality of coriander which is being traded on the NCDEX Exchange. In mid-July, a trader filed a written complaint to the exchange about the inferior quality of coriander.
Manoj Gupta, a trader from Sriganganagar, told dna, "The coriander quality is substandard and moisture level is high. In product contract, 9% of moisture is permissible but here, moisture is more than 11% which impacts the price of coriander."
Gupta further said, "In 2014, future prices of coriander were high as compared to spot prices. That time, the exchange was claiming that quality is superior, and that is the reason why we are selling at a premium. And now, coriander future prices are trading below spot prices due to quality concern."
On their part, traders are questioning the move by the exchange. In 10 days, 6,000 tonnes of coriander was placed in the exchange-registered warehouses.
Gupta said, "In the last one year, the total quantity of coriander was 5,000 tonne until August 11, and on August 21, it had grown to 21,000-level."
Sources say that traders from Madhya Pradesh, who were earlier involved in the Guar trading, are involved in the current fiasco too.
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