The Hindu Business Line : Pepper futures prices decline despite favourable conditions

The pepper futures market during the week witnessed decline in nearby and long positions due to speculative liquidation and huge outstanding positions. The low prices for Jun position continued to influence other nearby positions.

Activities were, however, confined to processors taking delivery from one warehouse to another warehouse. Some business has taken place with selected pockets in the US, Europe and Canada at $1,600-1,625 a tonne (C&F).

The domestic pepper is currently placed at an advantageous position because "we are at parity with other origins; some business is taking place with overseas buyers and there is no selling pressure in the spot", market sources told Business Line. But the futures market is on the decline, they said.

Quantity restriction

However, the market improved on Thursday on reports of a possible quantity restriction on imports from Sri Lanka, but to decline subsequently. June delivery continued to be quoted at lower levels. On Saturday at NCDEX, it was quoted at Rs 6,470 a quintal as against Rs 6,469 on June 10. At NMCE, it was up by Rs 273 on June 15 to close at Rs 6,696.

All the other positions compared to June 10 declined and the drop ranged from Rs 67 to Rs 141 a quintal. While at NMCE, except for October position, which dropped by Rs 21, all other positions moved up by Rs 23 -127 a quintal.

The total turn over at NCDEX on Saturday was 1,866 tonne as against 1,148 tonne on June 10 where as it was 17 tonne at NMCE compared to 271 tonne on previous weekend close.

The total open interest at NCDEX on Saturday stood at 18,976 tonne as against 19,104 tonne on June 10 while at NMCE it was 1,682 tonne compared to 1,917 tonne.

The outstanding position for June, July, August at NCDEX was 4,530 tonne, 6,994 tonne and 4,146 tonne respectively at Saturday close.

Spot prices ruled steady through out the week at Rs 6,500 (un-garbled) and Rs 6,900 (MG 1). There was no selling pressure.

IPC report

According to International Pepper Community (IPC) Saturday report,

due to tight supply, prices in Sarawak continued to be strengthened. Local prices increased from MR 481 per 100 kg to MR 506 at the week's close. Prices moved up by 3 per cent compared to the previous week. At Kochi, spot prices of un-garbled black were stable at Rs 6,500 per quintal. Trading at the futures market was reported to be more active, but prices eased by 2-3 per cent.

At Lampung, local prices were stable, with limited activity. In dollar terms however, the prices were down marginally by 1 per cent. In Vietnam, the market continued to be firm and producer prices at Daklak improved from VND18,200 per kg to VND 18,600.

White Pepper: There is an interest in the market, but little material is available. Limited stocks are held by farmers, in anticipation of better prices in future.

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