The Hindu Business Line : Pepper steady on buying support

PEPPER prices remained steady during the week on buying support. Spot prices remained steady at Rs 7,200 for MG 1 and Rs 6,900 for un-garbled a quintal throughout the week. Last week closing on December 22, prices of MG 1 and un-garbled were Rs 7,000 and Rs 6,700 respectively.

Futures have been maintaining their upward trend. Prices for January delivery was Rs 7,475 a quintal on Saturday as against Rs 7,249 on December 22. Feb Rs 7,352 (Rs 7,125), Mar Rs 7,499 (Rs 7,274), Apr Rs 7,625 (Rs 7,339), May Rs 7,553 (Rs 7,440) and June Rs 8,062 (Rs 7,581).

There is a good domestic demand as North India is reeling under severe cold and because of this masala grinding industry is operating in full swing to avoid grinding loss. An estimated 30,000 tonne of pepper is absorbed by this sector alone every year, Mr Kishor Shamji, President, India Pepper and Spice Trade Association, told Business Line.

He said that a good portion of the domestic demand is met directly from the primary markets evading tax. Arrivals at the terminal market are expected to pick up by early next week. He said that the major growers, who could afford to hold on their produce for long, might not sell at the prevailing prices while the small growers would be liquidating and that would meet the domestic demand and the procurement.

As the international market is on holidays, there has not been any demand. The actual position would be known by mid next week. However, as the Indian parity is at $1,700-$1,725 a tonne, $300 above the international price, no fresh orders are expected.

Meanwhile, Indonesia has raised its price to $1,425 a tonne. But it is reported that they do not hold much stock and are talking about the next crop. Added to this, are rumours that there would be sharp fall in Indonesian crop this year owing to change in weather conditions and the farmers' reluctance to maintain pepper vines.

According to latest projections by the trade, Indian production this year would be around 65,000 tonnes. With the carry forward stock of 20,000 tonnes, the total availability would come to 85,000 tonnes. Of this, about 55,000 tonnes would be absorbed by the domestic market, leaving a balance of 30,000 tonnes. Out of this 20,000 tonnes could be held by major growers. Then what would be left for export would be only 10,000 tonnes, he pointed out.

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Pepper steady on buying support