The Hindu Business Line : Pepper futures likely to rise on tight supply

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Kochi Jan. 21 Tight supply position in the domestic and world markets may push up the prices and the situation, therefore, signals of a favourable atmosphere for investment.

Already investors have started buying ready and selling futures. Arrivals at the terminal markets are virtually nil. Whatever produce come to the primary markets is bought by domestic dealers. Exporters are also covering. Besides, NCDEX delivered was bought at Rs 117 a kg. According to reports from Vietnam, it has raised the prices and is offering at $2,775 a tonne (c&f), while Indian parity is at around $2,900 a tonne (c&f).

The international players who had been waiting for the prices to fall after the new Vietnamese crop hit the market seem to have turned towards India. Contrary to the rumours, the new crop from Vietnam is likely to arrive in the markets only by end February/March as harvesting will reportedly begin after the Vietnamese New Year day in Feb, market observers told Business Line.

Meanwhile, there have been reports of a sharp fall in the Indian new crop, which is projected at around 40,000 tonnes as against a domestic demand of an estimated 50,000 tonne.

Good domestic demand has been reported and truckers are moving out pepper directly from the primary markets to Indore, Gwalior, Patna and Delhi by evading tax. "The real pinch is being felt now in the market as the availability has shrunk". Given this situation the prices are likely to move up further, they said.

The shortage is felt in the Indian consumer markets also where the prices have moved up of late, they said.

In the futures market pepper has become hot with the Feb contract moving up by Rs 271 a quintal on Saturday to close at Rs 11,755 from Rs 11,484 on Friday.

The increase in other positions was from Rs 240 to Rs 268 a quintal.

On NMCE, Feb moved up by Rs 155 a quintal to close at Rs 11,525. The increase in other positions was from Rs 166 to Rs 430 (May).

The total turnover on NCDEX dropped by 842 tonnes to 17,379 tonnes, while on NMCE, fell by 177 tonnes to 2,702 tonnes.

The total open interest on NCDEX on Saturday improved by 185 tonnes to 23,545 tonnes. On Saturday, 697 tonnes were delivered, while the open interest for February fell by 508 tonnes to 10,048 tonnes.

On NMCE, the total open interest stood at 3,967 tonnes on Saturday.

The total increase during the week from January 13 - 20 for all futures contract on NCDEX was from Rs 369 to Rs 474 a quintal, while that on NMCE was from Rs 300 to Rs715 a quintal.

Increased demand has also pushed up the spot prices by Rs 200 a quintal to Rs 10,900 (un-garbled) and Rs 11,500 (MG 1).

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