The Hindu Business Line : Pepper futures turn cold on liquidation

Pepper futures market witnessed a decline on Tuesday on liquidation by some bears holding long positions following reports that harvesting in Indonesia has commenced.

However, those who want to cover July/August will have to buy from the national exchanges, which have the stock. The July position in these exchanges will mature on July 15 and 20. Therefore, if the prices are not speculatively pushed up there is a potential for demand coming to India, market sources here claimed. Indian parity at present is $1,800 a tonne (c&f). What has happened now in the market could be viewed as a technical correction, especially when there is a shortfall in production, they said.

Meanwhile, unconfirmed reports said that Vietnam has raised its price by $50 to $1,900 a tonne (c&f).

Other factor

The other factor to have influenced the market were the reports that Marketfed, the Kerala Government procurement agency, had sold 200 tonnes of pepper to a national cooperative agency, which in turn had sent out the feeling that the former is in a mood to liquidate the remaining stock held by it.

The National cooperative had also bought NCDEX and NMCE delivered at Rs 7,700 a quintal.

The US market will reopen after holidays on Wednesday while the Europeans are holding back at a parity of $1,675-1,700 a tonne, they said.

The July contract on NCDEX dropped by Rs 228 a quintal on Tuesday to close at Rs 7,390, while on NMCE it fell by Rs 223 to close at Rs 7,430. The decline in all other positions on NCDEX was from Rs 162 to Rs 232 a quintal, while on NMCE it was from Rs 159 to Rs 274 a quintal.