The Hindu Business Line : Pepper futures crash on speculation

Kochi April 27 Pepper futures market, which has been on the downward trend in recent days, collapsed on Friday on excessive speculation driven by some cartel operators at a time when all the other origins world over were ruling firm at higher levels.

"Excessive speculation needs to be curbed failing which the cartels could play havoc in the market," market observers alleged.

Added to this, the lack of space in warehouses has put the market under pressure and that in turn has also contributed to the fall. This has forced the people to switch over to other positions.

When there is huge outstanding position there should be enough space to accommodate that much quantity, they told Business Line. NCDEX is said to be holding a stock of about 8,000 tonnes as against the total net open position of 28,413 tonnes on Friday.

In the international market, Indonesia was offering L Asta at $3,900 a tonne (f.o.b) as against India's parity of $3,950 a tonne (c&f). Brazil was offering B Asta at $3,750 a tonne (f.o.b) and B1 at $3,600 a tonne (f.o.b).

Meanwhile, overseas re-sellers who are reported to have sold MLSV at $4,075 a tonne are now finding it difficult to cover. These sellers might ship it out from any origin where ever available, they said.

On NCDEX, the May contract fell by Rs 939 a quintal on Friday to Rs 14,711. The fall in other contracts was from Rs 975 to Rs 1,065 a quintal.

May contract on NMCE dropped by 846 a quintal to Rs 14,116. The fall in June and August contracts was Rs 852 and Rs 771 a quintal respectively, while other contracts remained unchanged.

The total turnover on NCDEX shot up by 11,746 tonnes (29 per cent) to 51,877 tonnes, while on NMCE it moved up by 862 tonnes to 4,454 tonnes.

In tandem with the futures market trend, spot prices also fell by Rs 500 a quintal to Rs 13,900 (un-garbled) and Rs 14,500 (MG 1) on Friday.