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G K Nair

Triggered by reports of increase in Vietnam prices

Kochi March 21 Pepper futures shot up on Wednesday on good buying support following reports of increase in Vietnam prices contrary to the expectations of international players.

Those who delayed buying have now started to buy as the situation seems to have reached a point where they can no longer defer purchase.

Bull cartels in north Indian centres such as Jhalgaon, Gwalior, Indore and Nagpur were buying futures. Meanwhile, investors were selling futures and buying from NCDEX. As a result, the processors were buying actively from the spot and that has increased the spot prices as well.

The increase in prices here has pushed up the Indian parity to $3,050 a tonne (c&f), making it slightly on the higher side now in the international market.

NCDEX on Wednesday delivered 1,093 tonnes of pepper on the March contract, which matured on Tuesday. The April contract on NCDEX shot up by Rs 455 a quintal to Rs 12,940. The increase in other contracts was from Rs 439 to Rs 468 a quintal.

On NMCE, April contract went up by Rs 556 a quintal to Rs 12,500. The rise in other contracts was from Rs 397 to Rs 573 a quintal.

Turnover rises

The total turnover on Wednesday on NCDEX increased by 16,911 tonnes to 36,185 tonnes, while that on NMCE went up by 2,296 tonnes to 4,314 tonnes.

The total open interest on NCDEX moved up by 44 tonnes on Wednesday to 29,041 tonnes. April position fell by 1,748 tonnes to 12,221 tonnes, while May position went up by 1,823 tonnes to 10,322 tonnes. June position dropped by 104 tonnes to 4,325 tonnes.

The spot prices increased by Rs 200 a quintal on Wednesday to close at Rs 11,500 (un-garbled) and Rs 12,100 (MG 1) on buying support.

On NMCE, the total open interest improved by 197 tonnes to 3,720 tonnes. The April position declined by 11 tonnes to 316 tonnes while May went up by 160 tonnes to 2,136 tonnes.

Global prices

In fact, in the international market the prices of other origins are reportedly showing an upward trend on Wednesday. The sellers in Vietnam do not seem to be aggressive so far this year and that has pushed up its prices. Vietnam is said to have quoted 500 GL $2,350-$2,375 a tonne (f.o.b) on Wednesday as against $2,310 a tonne (fob) on Tuesday.

Brazil also reportedly raised the price of its Asta grade to $2,700 a tonne (f.o.b). Similarly, Lampong Asta was also at $2,900 (f.o.b). The prices continued to rule steady to higher on reports that crop in Brazil and Indonesia might be lower this year than that of the previous year. Thus, a tight supply position is anticipated in 2007 and if it happens, a decline in prices is unlikely in 2007, market observers told Business Line.

Meanwhile, the domestic demand continues to be strong. Direct buying was taking place from the primary markets in Kerala and Karnataka to cover the demand. Transporters operating from Mangalore have shifted their operations to North Kerala from where they were taking pepper to the North Indian destinations.

Similarly, such operations are continuing from Kerala's Idukki district to upcountry markets via Tamil Nadu centres, they said. Given this scenario there has been virtually no arrivals at the terminals markets, they said.

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