The Hindu Business Line : Pepper futures may rise on tight supply

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Kochi Jan. 28 Tight supply position and the very thin availability of spot pepper even after the beginning of the harvest signals an upward trend in pepper prices in the coming days.

On the other hand, arrivals at the terminal market continue to be very thin and upcountry buyers are procuring directly from the primary markets to meet the "very good domestic demand".

The futures market was very active and has shown an upward trend even without any overseas support. Probably, realising the tight supply position in the days ahead, traders, who have taken long positions, were said to be pushing up the market, market observers told Business Line.

In the international market, all origins are said to be firm.

However, Brazil was offering lower but it did not have much to offer, they said. Therefore, overseas buyers might have to turn towards India.

Over all availability in the world market this year is also projected to be less by 15 to 20 per cent, while there is unlikely to be any fall in demand, which is estimated to be growing at three per cent.

Given this scenario, pepper appears to be a good commodity to invest in, they said.

All forward contracts on Saturday moved up significantly. February contract on NCDEX increased by Rs189 a quintal to Rs 12,329 on Friday. The rise in other positions was from Rs 115 to Rs 161 a quintal.

On NMCE, February contract moved up by Rs 37 to Rs 11,900 a quintal. The increase in other positions was from Rs 139 to Rs 300 a quintal.

The total turn over on NCDEX dropped 9,646 tonnes to 27,411 tonnes, while on NMCE it was down by 1,850 tonnes to 4,687 tonnes.

The total open interest on NCDEX went up by 916 tonnes to 26,165 tonnes. The February and March positions stood at 8,021 tonnes and 11,118 tonnes respectively on Saturday.

On NMCE, the total open interest increased by 120 tonnes to 4,200 tonnes of which 3,679 tonne was of Mar.

In tandem with the futures market and short supply spot prices on Saturday increased by Rs 200 a quintal to Rs 11,500 (un-garbled) and Rs 12,100 (MG-1). The rise in spot prices during the week stood at Rs 600 a quintal.

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