The Hindu Business Line : Bears cartel push down pepper futures

Kochi, July 8 Pepper futures market during the week fell sharply on bearish activities by cartels which allegedly wanted to cover back their sales by spreading a fear psychosis in the market despite the fact that the fundamentals continued to remain strong.

In the international market the prices of Asta grade continued to remain firm at all other origins and the Indian MG1 still remained competitive. India does not offer other grades and therefore the Indian prices cannot be compared with that of the prices of lower grades in the world market, market sources here told Business Line.

Ruling High

A tight supply position was predicted for the current year by the IPC and other agencies on several occasions and hence the market is likely to rule high with marginal decline at some point when the harvesting in Indonesia begins sometime next month to be followed by the Brazil crop.

With a strong domestic market coupled with a possible decline in world output the Indian pepper prices are likely to remain at higher levels. The future deliveries for distant positions are ruling higher in the exchanges.

As a result, the spot sellers were not ready to part with their materials even though the nearby position was available cheap.

The decline in the nearby position is favourable for buying given the market trend in other origins for the Asta grade pepper.

FUTURES FALL

On NCDEX all the future deliveries fell during the week. The drop in all the contracts was from Rs 361 to Rs 524 a quintal. July was closed at Rs 14,695 as against Rs 15,216 a quintal at last weekend close.

On NMCE the fall was from Rs 500 to 586 a quintal.

July was available at Rs 14,348 a quintal. The total turnover on NCDEX dropped by 29,031 tonnes during the weekend to 95,853 tonnes while on NMCE it fell by 3,586 tonnes to 7,387 tonnes.

The total open interest on NMCE moved up by 390 tonnes to 24,601 tonnes. July position fell by 1,023 tonnes to 3,311 tonnes. August position moved up by 52 tonnes to 14,711 tonnes.

On NMCE the total open interest declined by 32 tonnes to 2,789 tonnes. July position moved up by 333 tonnes to 1,453 tonnes.

Spot prices during the week fell by Rs 200 a quintal and ruled steady at the weekend close at Rs 14,000 (un-garbled) and Rs 14,600 (MG 1) a quintal.

IPC REPORT

According to International Pepper Community report for the week the black pepper market was calm this week compared with active trading during last week.

In India, prices were relatively stable and fluctuated at narrow range. When compared with last week, prices increased marginally by 1-3 per cent.

In Vietnam, the market was slower. Prices of raw material at Daklak eased from VND 53,000 a kg to VND 52,000 at the week’s close.

In Sarawak, prices were stable at around MYR 10,190 a tonne locally and $4,150 a tonne FOB.

In Lampung, local prices remained stable at around IDR.30,000 a kg.

In Sri Lanka, average pepper price at producing areas was SL.Rs345 a kg down from SL.Rs 351 last week.

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