The Hindu Business Line : Pepper futures decline during the week

Kochi June 10 The pepper futures market during the week has shown a sharp decline mainly on the uncertainty over the quantitative restrictions imposed on nearby positions and on rumours of downward trend in Vietnam.

Except for June contract all others have fallen from Rs 119 to Rs 205 a quintal during the week on NCDEX while on NMCE all the contracts dropped except September, which remained steady.

Restrictions

There was no selling pressure on the spot. Exporters were buying from exchanges and exporting. But, most of them were not venturing into covering July/August/ September positions because of the uncertainty over the quantitative restrictions, which would come into force from July 16.

In the international market, the prices at all other origins witnessed marginal decline but were by and large steady. No Asta grade pepper was on offer and hence the Indian parity for MG 1 remained competitive. And as a result some quantity was traded during the week. The total turnover on NCDEX fell by 12,316 tonnes during the week to 1,29,033 tonnes while on NMCE it declined by 2,344 tonnes to 10,854 tonnes. The total open interest on NCDEX decreased by 703 tonnes to 26,240 tonnes at weekend close.

Investors Cautious

The fall in June position was at 2,540 tonnes to 7,675 tonnes as the maturity of the contract is nearing. However, July and August positions increased by 896 tonnes and 602 tonnes respectively to 11,438 tonnes and 4,877 tonnes.

On NMCE, the total open interest during the week increased by 243 tonnes to close at 3,806 tonnes. June position fell by 108 tonnes to 2,484 tonnes.

Because of the quantitative restrictions, the investors are in a dilemma and hence till a decision on this issue emerges, uncertainty is likely to keep the investors cautious about entering the market.

In tandem with the futures market trend, spot prices during the week declined by Rs 100 a quintal to close at Rs 13,600 (un-garbled) and Rs 14,200 (MG 1) at the weekend.

IPC REPORT

According to International Pepper Community (IPC) black pepper prices continued to decline during the week, with exception of India. At Kochi, average price of black pepper increased marginally by 1 per cent, but trading activity remained calm as last week. In Sarawak, local prices eased from MR. 10,170 a tonne at the end of last week to MR. 10,050 at the week's close. FOB price also fell marginally.

In Lampung, average local prices were reported stable at around IDR 29,000, but in Dollar terms, the price declined by 1 per cent due to strengthening of

dollar against IDR.

At Daklak, Vietnam, the price for raw materials eased to VND 49,500 a kg from VND 52,000 at last week's close. In Sri Lanka, average price prevailed at producing areas was SLRs. 336.33 a kg or $2,925 a tonne.

WHITE PEPPER

In Bangka local prices of Muntok white declined IDR 1,000 a kg to

IDR 37,500 this week. In Sarawak, local prices eased marginally by 1 per cent compared with last week, while FOB prices were reported stable.

During April 2007, India exported around 1,600 tonnes of pepper worth Rs 20.6 crore as against 1,500 tonnes worth Rs 13 crore in April 2006. During January-April 2007, total export from India was 9,376 tonnes valued at Rs 111.8 crore. Compared with 2006, export during this period increased by 52 per cent in volume and 118 per cent in value.