The Hindu Business Line : Pepper futures fall on liquidation

Market tactics
Overseas buyers holding back stocks hoping to more pressure on the Indian market.
Some were pretending to have covered their requirements, but in reality they have not.

Kochi , Dec. 6

Pepper futures continued their declining trend on bull liquidation and switching over to nearby positions to avoid taking delivery due to apprehensions on the quality of materials in the warehouses.

The downward trend is only in the futures market. There is no selling pressure in the spot.

At the same time, despite being the cheapest source, overseas buyers are holding back on the hope that abstaining from the market would build up more pressure on the Indian market.

Market sources told Business Line that even some international players were just pretending to have covered their requirements, but in reality they have not.

All these tactics are to push down the prices further. On the other hand, the exporters are not supporting because they are sceptical of the quality, as some alleged that when taken delivery it was found that the material contained 300-400 gm dust besides a shortage of one kg per bag.

The continuous declining trend has also confused overseas buyers who are holding back and as a result no orders have come forward during the week so far, the sources said.

The Indian parity on Wednesday was at $2,450 a tonne c&f Europe and $2,575-2,600 c&f US.

Nobody was selling Asta grade in the world market now. Brazil and Vietnam were said to be offering Asta grade at prices above the

Indian parity, they said, adding Indonesia had nothing to sell now.

Contracts dip

December contract on NCDEX dropped by Rs 74 a kg to Rs 9,965 a quintal, while on NMCE it was down by Rs 90 a quintal to Rs 9,430.

The decline in other positions on NCDEX on Wednesday was from Rs 65 to Rs 166 a quintal, while on NMCE it was from Rs 69 to Rs 353 a quintal.

The total turnover on NCDEX fell by 7,838 tonnes to 20,327 tonnes, while on NMCE it was up by 15 tonnes to close at 3,866 tonnes.

The total open interest on NCDEX increased by 193 tonnes to 24,361 tonnes, while on NMCE it was down by 35 tonnes to 5,029 tonnes.

Open interest

The open interest of December dropped by 568 tonnes on NCDEX on Wednesday to 7,769 tonnes, while that of January increased by 410 tonnes to 11,693 tonnes. The February position also went up by 308 tonnes.

The Net open position on NMCE for December also declined by 216 tonnes to close at 3,032 tonnes.

The spot prices also declined by Rs 100 a quintal in tandem with the futures market trend to close at Rs 9,700 (ungarbled) and Rs 10,300 (MG 1) on Wednesday.

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