The Hindu Business Line : Sharp fall in pepper futures

Kochi June 13 Declining trend continued in the pepper futures as no positive decision has emanated so far from the Regulator on the quantitative restrictions on nearby positions, which will apply on July contracts from June 16.

The futures witnessed a sharp fall on Wednesday as the maturity is drawing near.

As a result, all the hedgers who are holding positions were liquidating. However, the fall in futures was good for exporters who could cover and export. But, in the long-term it is going to affect the players whose participation would be limited to 100 tonnes, market observers here told Business Line.

The continuous fall in the futures market has made Indian pepper very competitive in the international market "only due to a technical squeeze and not on fundamental changes," they said. Vietnam was quoting 500 GL at $3,375 a tonne (f.o.b) while Brazil was offering B1 at $3,600 a tonne (f.o.b) and B Asta at $3,700 - $3,750 a tonne (f.o.b). The Indian parity for 550 GL was at $3,700 a tonne (c&f).

FUTURES FALL

June contract on NCDEX fell sharply by Rs 487 a quintal on Wednesday to Rs 13,365. The drop in other contracts was from Rs 471 to Rs 636 a quintal.

On NMCE, June contract dropped by Rs 233 a quintal to Rs 13,000. The fall in other contracts was from Rs 247 to Rs 471 a quintal.

The total turnover on NCDEX moved up by 6,241 tonnes to 23,830 tonnes, while on NMCE it went up by 467 tonnes to 1,623 tonnes.

On NMCE total open interest fell by 1,923 tonnes to 2,431 tonnes. June position dropped by 2,030 tonnes to 379 tonnes.

The spot prices in tandem with the declining trend in the futures dropped by Rs 200 a quintal on Wednesday to close at Rs 13,300 (un-garbled) and Rs 13,900 (MG 1).