The Hindu Business Line : Pepper slides on selling pressure

Spot prices of MG 1 and Ungarbled dropped by Rs 150 a quintal to Rs 7,200 and Rs 6,800 respectively on Saturday from Rs 7,350 and Rs 6,950 on December 17.

The fall in futures was between Rs 280 and Rs 313 a quintal on Saturday. Prices quoted for January delivery was Rs 7,163 as against Rs 7,460 on December 17; February Rs 7,340 (Rs 7,645); March Rs 7,455 (Rs 7,765); April Rs 7,553 (Rs 7,866); and May Rs 7,702 (Rs 8,022) a quintal.

Market sources attributed the downward trend to selling pressure from speculators, arrival of new crop and increased arrivals from Sri Lanka. Those speculators who bought long positions in the NCDEX, which trades at higher levels among the three exchanges, have started selling and shifted to nearby positions. Many having stocks held for the past nine months also had to release it and this phenomenon has also increased the availability in the market, market sources told Business Line. In fact, the domestic prices were pushed up by speculative activities and, hence, it is now coming down to realistic levels, they claimed.

Harvesting of the new crop has also begun in some parts of Kerala, which has also started arriving in the market.

Added to this was the resumption of arrivals from Sri Lanka at Rs 71 anywhere in India. The island neighbour is offering now at Rs 69.50 a kg and when added Rs 1.50 towards clearing and forwarding charges the landed cost comes to Rs 71 a kg. Where as, the Indian pepper bought in Kochi at Rs 69.50 a kg, when transported to Delhi the landed cost would come to Rs 75 including VAT and freight. Though the imported pepper is qualitatively inferior as it contains 14 per cent moisture and weighing 525 - 535 GL, the dealers are concerned only about prices, they alleged. Thus, the domestic demand is now by and large met by imports.

Sri Lanka, which had slowed down shipments in the recent past, has suddenly re-emerged with stocks , trading sources here pointed out.

Due to Christmas holidays there is no demand from overseas. Brazil, which has completed harvesting of about 75 per cent of its current crop is reported to have shipped out 50-60 per cent of it. Meanwhile, Indonesia, which was holding some stocks, is said to have sold to US markets at $1,675-$ 1,700 a tonne (C&F) as against our parity of $1,700 - Rs 1,725 a tonne (C&F) New York. Indonesia, in fact, is pushing ahead its pepper by quoting $50-$25 less than that of the Indian parity.

Meanwhile, Vietnam is not offering ASTA grade. Of late, the world's largest producer is concentrating on converting its black pepper into white rather than converting it into ASTA grade, as white pepper is found to be more profitable, they added.