The Hindu Business Line : Pepper futures: Advantageous position likely from March to May

The current world pepper market situation indicates that investment in March, April and May positions likely to be advantageous as the physical tightness may play a positive role. After June/July the supply position is expected to be tight as the world production in almost all the origins is said to be less next year. Real selling pressure is expected only after the Vietnamese harvesting expected to begin in March 2007. Until then the demand could come to India, where pepper is available apart from Brazil, which is offering cheap. In the near terms Indian parity is expected to range between $2,500 and $2,700 a tonne (C&F) while according to mid-term review it could be between $2,400 and $2,700 a tonne, market observers told Business Line.

In the international market Brazil and Vietnam said to have reduced their prices. Brazil was offering B2 at $2,250 a tonne (fob) while B1 at $2,350 (fob) and B Asta at $2,500 (fob). Whereas, Indian parity is at $2,550 - $2,600 a tonne (C&F) for 500 GL while MG 1 is at $2,650 - $2,700 a tonne (C&F). Thus, the Indian price is competitive.

Export Subsidy

Overseas buyers have almost covered all their purchases up to December. However, select exporters in India are not willing to sell January/February on the apprehension that the export subsidy might not be available beyond December.

On the other hand, the buyers have adopted a wait and watch attitude before making any fresh purchases. Following the intervention by the Forward Markets Commission (FMC) the fluctuations in the market appears to have been restricted. The November contract on NCDEX on Saturday moved up by Rs 18 to close at Rs 10,700 from Rs 10,718 on Friday. December, January, February and March positions declined by Rs 69, Rs 56, Rs 101 and Rs 63 a quintal respectively while April and May went up by Rs 78 and Rs 259 respectively.

On NMCE November, December and February fell by Rs 50, Rs 56 and Rs 100 respectively while March contract increased by Rs 52 a quintal. January and April ruled steady at previous level. The total turn over on NCDEX on Saturday fell by 13,318 tonnes to 11,305 tonnes from 24,623 tonnes on Friday. On NMCE, it dropped by 2,966 tonnes to 2,463 tonnes from 5,429 tonnes.

The total open interest on NCDEX stood at 23,608 tonnes as against 23,570 tonnes. November position dropped by 151 tonnes to 4,620 tonnes from 4,771 tonnes on Friday. However, December position increased by 133 tonnes to 13,365 tonnes from 13,232 tonnes.

On NMCE, December open interest dropped by 34 tonnes to 4,031 tonnes from 4,065 tonnes on Friday. Spot prices ruled steady at previous levels of Rs 10,300 (un-garbled) and Rs 10,900 (MG 1) a quintal on Saturday.

IPC REPORT

According to an International Pepper Community (IPC) report on Saturday, Black Pepper market continued to remain quiet. At Cochin, spot prices of Malabar black showed an improvement compared to last week's close, but on an average, the prices were relatively stable and down marginally by 1 per cent compared to last week. The price also continued to be the cheapest for nearby shipment. This was likely due to excess stocks looking to be moved before the December/January harvest.

Futures Prices

At the Commodity exchange, futures prices improved marginally by 1 per cent, with limited activity. In Vietnam, the market was very quiet during the last two weeks and prices eased further. At HCMC, prices for local purchasing decreased from VND 38,500 per kg to VND 37,500. At Daklak, the price of raw material decreased from VND 35,000 to VND 34,000. Lampung showed a little selling pressure and producer prices were reported down by 7 per cent. In Kuching, local price eased marginally by 1 per cent, but FOB prices were reported stable.

However, there was some request for white pepper in Bangka and prices at local market improved by 3 per cent. At Kuching, however, prices eased by 2 per cent, while in Hainan, prices were reported stable.

More Stories on : Spices & Condiments | Commodity Exchanges

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
N-E monsoon records surplus run in TN, Kerala

ITC's 1st phase farm foray in Bengal set to roll by mid 2007

Coonoor tea prices drop

Coimbatore tea posts largest turnover in South

Gold futures could rise

Downward tweak likely in palm oil

Silver holds more promise than gold

AP, Silk Board to part-fund Chinese reeling machine buy

TN fairs to have special windows for jute products

Egg prices may meet resistance at current levels

Pepper futures: Advantageous position likely from March to May

China card leads to gold price spike