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G.K. Nair

Introduction of addl margin on sellers fails to make any impact

Kochi , Dec. 13

Pepper futures market declined on Wednesday for want of buying support and intra-day liquidation.

Introduction of four per cent additional margin on sellers to curb sales failed to make any impact as intra-day trading was taking place where no margin is paid.

Hence, the prices failed to move up and instead dropped in the futures counter. In fact, real control must be introduced on intra-day trading operations without paying any margin, as thousands of tonnes are traded without margin and that was negatively affecting the market, market observers here told Business Line.

The December contract on the NCDEX dropped by Rs 69 a quintal to close at Rs 9,605 from Rs 9,674 on Tuesday. The decline in other positions was from Rs 38 to Rs 142 a quintal.

On the NMCE, December contract ruled steady at Tuesday's level of Rs 9,246 a quintal. January, March and April dropped by Rs 52, Rs 73 and Rs 25 respectively, while February and May improved by Rs 125 and Rs 46 a quintal, respectively.

Turnover drops

The total turnover on the NCDEX dropped by 8,920 tonnes to 10,906 tonnes from 19,826 tonnes, while on NMCE it fell by 923 tonnes to 1,521 tonnes from 2,444 tonnes on Tuesday.

On the NCDEX, total open interest increased by 176 tonnes to 23,824 tonnes from 23,648 tonnes. December position dropped by 321 tonnes to 4,315 tonnes from 4,636 tonnes while January increased by 44 tonnes to 11,823 tonnes and February went up by 379 tonnes to 3,742 tonnes from 3,363 tonnes. Spot prices ruled steady at previous levels of Rs 9,200 (un-garbled) and Rs 9,800 (MG 1) a quintal on Wednesday.

The stock available with the NCDEX is around 3,000 tonnes as against the net open position of 23,824 tonnes, which speaks of the situation in the exchange.

On the NMCE, it dropped by 1,117 tonnes to 3,633 tonnes from 4,750 tonnes. December net open position here fell by 1,211 tonnes to 448 tonnes from 1,659 tonnes indicating delivery at discounted prices.

The Indian parity ruled at $2,500 a tonne (c&f) while Brazil was offering at $2,325-$2,450 a tonne (c&f). But no trading was taking place. The overseas buyers are waiting for the new crop to arrive anticipating that the prices might fall.

On the other hand, many overseas buyers are yet to gain confidence in the market. In India, the futures prices are much below the spot prices and hence the buyers are said to be insisting for offers at the futures levels.

Arrivals at the terminal market continued to remain thin while the 11 tonne that arrived on Tuesday is yet to be sold. Not much activity was seen in the spot market also.

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