The Hindu Business Line : Pepper slips on reports of import duty cut

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Pepper slips on reports of import duty cut

G.K. Nair

Kochi March 29 Pepper futures slipped on Thursday following reports that the Union Government, under pressure from South and South-East Asian countries, could cut import duty on pepper to 20 per cent from 70 per cent.

Anticipating a drop in prices in the event of an import duty cut, speculators started liquidating their positions and this drove the market down, market observers told Business Line.

The April contract dropped by Rs 216 a quintal to Rs 13,406. The drop in other contracts was from Rs 120 to Rs 165 a quintal.

On NMCE, the April contract fell by Rs 82 a quintal to Rs 13,090. The fall in other contracts was from Rs 5 to Rs 219 a quintal.

The total turnover went up by 11,247 tonnes to 42,851 tonnes on NCDEX, while it went up by 1,126 tonnes to 6,763 tonnes on NMCE.

The total open interest on NCDEX dropped by 202 tonnes to 28,878 tonnes.

The April position fell by 609 tonnes to 7,563 tonnes, while May declined by 33 tonnes to 13,902 tonnes. The June position moved up by 323 tonnes to 4,802 tonnes.

On NMCE, the total open interest moved up by 88 tonnes to 4,485 tonnes.

The April position stood at 313 tonnes, while May went up by 56 tonnes to 2,847 tonnes.

Spot prices

However, the reports of duty cut did not seem to have had any impact on spot prices, which ruled steady on buying support at Rs 12,400 (un-garbled) and Rs 13,000 (MG 1) a quintal.

In the international market, the prices of other origins ruled steady at Wednesday's level.

The world market prices are likely to rule higher given the tight supply position; when freight and the reported 20 per cent duty are added, the landed cost of imported pepper would be even higher, sources said.

Processors who sold to investors exchange-delivered pepper were buying spot actively.

Due to the heavy domestic demand, "we remain out-priced now."

Even Kudagu pepper is said to have traded higher than that of Kerala at Rs 132-133 a kg.

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