The Hindu Business Line : Pepper futures: Favourable scenario for the buyers

The continuous sharp fall in pepper futures during the past couple of days has created a favourable scenario for the buyers who could buy at low prices and sell at below international prices in the overseas markets.

Given the tight supply position prevailing in the world market coupled with international prices ruling above Indian parity, fall in the futures market to floor levels might bring in increased demand from overseas.

However, the alleged heavy manipulation of the market to pull down the prices is an unhealthy operation, when the fundamentals were not showing any bearish sentiments.

Those who had pushed the prices down to the bottom levels could raise it after buying sufficient quantities for selling it at higher prices, market observers alleged.

Price Uncertainty

Therefore, such kind of manipulations might send out wrong signals and even it could drive away the buyers because of the uncertainty in the prices emerging out of wide and wild fluctuations without any rime and reason, they claimed.

In the international market, Brazil was offering B Asta at $2,750 a tonne (FOB) while Indonesia is on holidays. Vietnam was offering 500 GL at $2,550 a tonne (FOB) while 550 GL at $2,650 a tonne (FOB). Meanwhile, traders alleged that the market is being driven by cartels and the exchanges hands in glove, while the regulator remained a mere spectator.

In fact, in such a situation the small and medium players would be forced to get out of the market.

Apart from pepper, other spices such as chilli, cumin and turmeric had also become the victim of such market manipulations and hence the Spices Board should intervene, they demanded.

The sharp fall in pepper prices at a time when the harvesting of the new crop is round the corner might hit the farmers adversely, they predicted.

The situation demands strengthening of the regulator so as to ensure a healthy commodity market as looking at more and more turnover alone would not help, they said.

On NCDEX, November contract on Saturday fell by Rs 1,023 a quintal to close at Rs 10,385 from Rs 11,408 on Friday.

The drop during the week from October 21-28 stood at Rs 2,122 a quintal.

The decline in other positions was from Rs 973 to Rs 1,102 a quintal on Saturday while that of during the week was from Rs 2,249 to Rs 2,564 a quintal.

On NMCE, November contract dropped by Rs 700 a quintal to close at Rs 10,250 from Rs 10,950 on Saturday. The fall in other positions was from Rs 528 to Rs 1,025 a quintal. The total decline for November on NMCE during the week was Rs 1,840 a quintal while that for other positions was from Rs 1,855 to Rs 2,238 a quintal.

Open Interest

The total turnover on NCDEX fell by 21,924 tonne to close at 15,385 tonne on Saturday from 37,309 tonne yesterday. On NMCE it fell by 1,080 tonne to 5,081 tonne from 6,161 tonne.

The total open interest on NCDEX declined by 518 tonne to close at 23,318 tonne from 23,838 tonne, while on NMCE it moved up by 32 tonne to close at 4,892 tonne from 4,860 tonne.

The outstanding position for November and December on NCDEX was 8,320 tonne and 10,761 tonne respectively while on NMCE December position stood at 3,944 tonne. The spot prices also fell by Rs 500 a quintal in tandem with the sharp decline in the futures to close at Rs 10,600 (un-garbled) and Rs 11,200 (MG 1) on Saturday.

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