The Hindu Business Line : Bears may peg down pepper futures

Bearish sentiments prevailing at present in the international and domestic markets currently might keep prices down in the coming days. The market may show a downward correction now, market sources said.

The reasons for the fall in futures market are that Brazil is selling B Asta Oct/Nov/Dec cheap at $1,900 a tonne and secondly, buyers said to have well covered Aug/Sep from Vietnam.

Notable absence of some major players in the world market is an indication to this. Hence, no buying support from the world market is forthcoming.

The declining trend seems to have compelled those bought from the Marketfed to push it into the exchanges.

Harvesting delayed

Meanwhile, harvesting in Indonesia has been delayed by about two weeks. The black pepper output is estimated at 17,000 - 18,000 tonnes.

As the supply continues to be tight, Indonesia is offering at $2,425 a tonne (C&F), while India's parity is at $2,375 a tonne (c&f). Meanwhile, production in Brazil is estimated at 35,000 tonnes this year. According to New York-based brokers, multinationals having stock in Vietnam are offering at $2,325 a tonne. However, buyers in the world market are holding back and at the same time good quality pepper sellers are also keeping away anticipating that the prices would move up.

The scenario shows that the supply position might remain tight and below the expected levels this year and therefore the prices are likely to maintain at higher levels than that of last year.

Downward trend

The futures market continued its downward trend with all the contracts on both NCDEX and NMCE falling substantially.

August contract on NCDEX fell by Rs 269 a quintal to close at Rs 10,130 a quintal , while on NMCE, the drop was by Rs 85 to close at Rs 10,100.

The decrease in other contracts on NCDEX was from Rs 124 to Rs 232 a quintal, while on NMCE, it was from Rs 121 to Rs 170 a quintal.

Total turnover

The total turnover at NCDEX on Saturday dropped by 8,875 tonnes to 13,007 tonnes, while at NMCE it fell by 2,110 tonnes to 2,079 tonnes.

The total open interest at NCDEX was 24,902 tonnes on Saturday as against 24,422 tonnes on Friday, while at NMCE it was 4,242 tonnes compared to 4,391 tonnes.

The outstanding position for August, September and October was 3,865 tonnes, 7,931 tonnes and 9,211 tonnes respectively.

In the domestic market, the selling pressure in Kodagu at Rs 99 a kg anywhere in India coupled with no domestic demand has pushed down the spot prices by Rs 200 a quintal to close on Saturday at Rs 9,500 (un-garbled) and Rs 9,900 (MG 1). The slow domestic demand is attributed to floods in States such as Gujarat and Orissa besides a sluggish market in Delhi.

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