The Hindu Business Line : Tight supply keeps pepper futures hot

Kochi March 28 The current tight supply position in the world market and the consequent rise in prices in Vietnam continued to push up the pepper futures market.

Lot of investors were actively buying physical pepper delivered while the processors were buying farm grade pepper, market observers told Business Line. Distant positions were at much higher levels.

April contract on NCDEX moved up by Rs 90 a quintal to Rs 13,641. The increase in other contracts was from Rs 96 to Rs 222 a quintal.

On NMCE, however, April contract was down by Rs 95 a quintal to Rs 13,190. All other contracts except for September increased by Rs 44 to Rs 117 a quintal, while September dropped by Rs 86 a quintal to Rs 14,450.

The total turn over on NCDEX dropped by 38 per cent on Wednesday to 31,604 tonnes from 51,276 tonnes. In spite of such a huge turnover, the increase in open interest on Wednesday was a meagre 2.5 per cent.

On NMCE, the total turnover dropped by 3,665 tonnes to 5,637 tonnes.

The open interest on NCDEX for May increased by 428 tonnes to 13,935 tonnes, while June moved up by 339 tonnes to 4,479 tonnes. April position stood at 8,172 tonnes.

On NMCE, the total open interest went up by 58 tonnes to 4,397 tonnes. April position stood at 308 tonnesm, while May at 2,791 tonnes up by 54 tonnes.

Contrary to expectations of the pepper trade world over, the pepper market in Vietnam continued to remain firm with an increase of 10 per cent in prices during the past one week. International market sources attributed this phenomenon to untimely rains, which have delayed harvesting besides negatively affecting post-harvest processing. Add to this, farmers unlike in the past are said to be financially sound to hold back their produce. The situation has put the exporters having short-term commitments and those who were postponing buying in a dilemma now.

The tight supply position appears to be creating a situation for further rise in the prices in near term, they claimed.

Vietnam said to have quoted FAQ 500 GL at $2,600 a tonne (f.o.b) and 550 GL $2,750 a tonne (f.o.b). Brazil was reportedly offering BAsta at $2,800 (Victoria) - $2,900 (Belam) a tonne (f.o.b).

The domestic demand continued to be very good and it is met directly from the primary markets. As the spot prices shot up by Rs 400 a quintal on Tuesday there was some selling pressure. Harvesting has almost come to an end except in Kodagu region and some parts of Tamil Nadu.

Spot prices ruled steady on Wednesday at previous level of Rs 12,400 (un-garbled) and Rs 13,000 (MG 1) a quintal.

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