The Hindu Business Line : Pepper declines on poor buying

Spot prices dropped by Rs 200 on Monday while futures fell by Rs 92-317 a quintal. Spot MG 1 and ungarbled were sold at Rs 6,800 and Rs 6,500 on Monday as against Rs 7,000 and Rs 7,000 respectively on August 16.

Futures prices were September: Rs 6,829 as against last Monday's Rs 6,939, October: Rs 6,931 (Rs 7,173), November: Rs 7,153 (Rs 7,470), December: Rs 7,125 (Rs 7,371), January: Rs 7,318 (Rs 7,412) and February: Rs 7,179 (Rs 7,271).

Buyers were not active as they were anticipating arrival of large quantity of Sri Lankan pepper.

On the other hand, there are reports of an increase in production in Karnataka and Kerala. "Substantial quantity of Sri Lankan pepper said to have been contracted last week at $1,400-$1,425 a tonne and consignments of 125 tonne have either landed or expected to land this week," market sources told Business Line. The shipments are for inland destinations, they added.

Moreover, reports of higher production in the Coorg region of Karnataka and Kerala's Wayand district have also prevented the dealers from buying.

Given the favourable weather conditions in the growing areas, the production this season would be higher than that of last year.

At the same time the destruction of vines by drought during March-May in Wayanad district would result in a decline in output from these areas, market sources pointed out. However, the production, they claimed, could be around 70,000-75,000 tonnes this year as against last year's estimated production of 60,000 tonne.

In the global market also there is not much activity, as the buyers are waiting for the prices to fall further. Meanwhile, the European buyers are on summer holidays.

As against the Indian parity of $1,600- $1,625 a tonne, Brazil is now offering at $1,325-$1,325 a tonne while Indonesia at $1,350-$1,375 a tonne. Buyers would turn to India for MG 1 if "our prices ruled at $1,575-$1,600 a tonne," Mr Kishor Shamji, President, India Pepper and Spice Trade Association (IPSTA), said. However, buying activity is unlikely for few weeks to come, he added.