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Thursday, May 06, 2004

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Pepper prices up on demand

G.K. Nair

Kochi , May 5

PEPPER prices increased on good domestic demand and short supply at the terminal market here.

Spot pepper increased by Rs 100 a quintal. MG1 was sold at Rs 7,400 and ungarbled at Rs 7,100 as against Rs 7,300 and Rs 7,000 last Friday.

Futures have also shown upward trend. May delivery on Wednesday was Rs 7,526 as against Rs 7,384, June Rs 7,714 (Rs 7,569), July 7,934 (Rs 7,876), August Rs 8,205 (Rs 8,125), September Rs 8,418 (Rs 8,354) and October Rs 8,627 (Rs 8,490).

May delivery is nearing maturity. At the moment, the market would depend on ``whether the bulls will take delivery or take up future position,'' Mr Kishor Shamji, President, India Pepper and Spice Trade Association (IPSTA), told Business Line. He said it was risky to keep the stock for two months as it would require re-processing and hence the sellers might opt for delivery.

The recent rains had slowed down selling activity. However, there was good domestic demand. But much of the demand was met by direct sales from the primary markets in Kerala's Wayanad district and the Kodagu region in Karnataka, he said.

Similarly, 5-6 loads of pepper were moving out from Idukki district via Cumbum and Theni to Chennai, he said. The demand from overseas was limited and only those prefer MG1 and were ready to pay a premium of $200 a tonne were buying from India. Indian parity was at $1,700 a tonne, he said.

There was not much activity in the US market as the players were busy with the 99th ASTA Convention.

The international market also remained steady with buyers looking at now Indonesian crop in August/September. Malaysian harvesting is on while it is expected to commence after May 15. Vietnam price has stabilised at $1,200 a tonne. Brazil and Indonesia are offering at $1,475-1,500 a tonne. Vietnam is also started converting 550 GL in to white. International players with local companies in Vietnam are buying heavily to fulfil their commitments, they said.

According to international reports, the Brazilian crop this year is likely to be large this year.

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