The Hindu Business Line : Pepper futures decline on selling pressure

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Kochi Feb. 21 Pepper futures market on Wednesday witnessed marginal fluctuation on both ways and prices of most of the contracts declined on selling pressure and uncertainty over delivery.

February contract on NCDEX matured and 389 tonnes of pepper were delivered. It closed at Rs 12,532 a quintal. March contract was down by Rs 75 a quintal to Rs 12,815. April, May and June contracts declined by Rs 51, Rs 20 and Rs 19 a quintal respectively, while July and August moved up by Rs 61 and Rs 65 respectively on Wednesday.

March contract on NMCE dropped by Rs 103 to Rs 12,369 a quintal. April, May and July declined by Rs 100, Rs 5 and Rs 90 a quintal respectively, while June and August went up by Rs 9 and Rs 88 a quintal respectively. The total turnover on NCDEX increased by 7,087 tonnes to close at 23,494 tonnes, while on NMCE it moved up by 207 tonnes to 3,412 tonnes.

Open interest

The total open interest on NCDEX increased by 530 tonnes to 29,759 tonnes, while the March position dropped by 1,280 tonnes to 15,169 tonnes on Wednesday. The total open position on NMCE slipped by 18 tonnes to 5,048 tonnes of which the March position stood at 4,204 tonnes.

Meanwhile, the processors who have sold the commodity are in trouble as they are not in a position to deliver the goods as the warehouses of the NCDEX exchange are said to be full. Those who sold would not get the money until the goods are delivered which is not taking place, market sources claimed.

The spot prices on selling pressure declined by Rs 100 a quintal to close at Rs 11,800 (un-garbled) and Rs 12,400 (MG 1) on Wednesday.

The NCDEX outstanding position for March is 15,169 tonnes and hence it should have sufficient warehouse facilities to accommodate at least half of this volume, market observers told Business Line.

It gives the impression that the exchange was supporting the buyers discouraging delivery, they alleged. Therefore, they said that the regulator should look into these aspects.

The investors are said to have bought at high prices ranging from Rs 127 to 128.50 a kg on Wednesday.

In the international market all the other origins are closed for holidays and hence there has not been any activity. However, unconfirmed reports from Indonesia said that some small quantity was traded at $2,800 a tonne (f.o.b.).

The domestic demand continued to be good and it is met by direct buying from the primary market.

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