The Hindu Business Line : Pepper set to turn hot on tight supply

The prevailing tight supply position in the world pepper market and anticipation of possible demand for July/August from overseas has placed Indian pepper at an advantageous position, provided the prices remain competitive.

Bullish sentiment is prevailing in the market as a result of delay in Indonesian harvest and the possible decline in production.

Rise in all contracts

Prices in the pepper futures market soared during the week on bullish reports. The increase in all the contracts on NCDEX during the week was from Rs 235-285 a quintal, while on NMCE it was from Rs 250-320.

At the week-end trading on NCDEX, July contracts went up to Rs 7,680 a quintal and then closed at Rs 7,635 a quintal, up Rs 42 from Friday. Whereas on NMCE, it moved up by Rs 92 to close at Rs 7,675 a quintal. All the other positions at both the exchanges also showed an upward trend on Saturday.

The total turnover on NCDEX, however, dropped by 7,414 tonnes to close at 2,246 tonnes from 9,660 on Friday, while on NMCE it fell by 1,392 to close at 817 tonnes.

Open interest

The total open interest on NCDEX on Saturday was 17,459 tonnes as against 17,404 tonnes. On NMCE, it was 3,106 tonnes compared with 3,136 tonnes.

The total outstanding position on NCDEX for July and August was 3,754 tonnes and 7,136 tonnes respectively.

Global trend

In the international market prices continued to rule firm.In Sarawak, the situation was same as last week, where stocks in the market were very limited and prices improved further. At Kuching, local prices moved up from Malaysian ringgit (MY) 5.37 a kg to MYR 5.66. Compared with last week, the price increased by four per cent at the local market and three per cent for f.o.b.

Vietnam rates

In Lampung (Indonesia), producer prices remain at the level of Indonesia rupaiah 11,000 per kg, but in dollar terms, has increased by three per cent. In Vietnam, prices were reported to have increased further. At Daklak, producer price increased from Vietnam dong 20,000 to 21,500 per kg this week.

There was no selling pressure in the spot market during the week. The price of un-garbled black increased from Rs.7,050 a quintal to Rs.7,200 at the week's close.