The Hindu Business Line : Bearish trend makes pepper competitive

Kochi, Aug. 5 The continued fall in the pepper prices resultant from the bearish cartel operations has made the commodity competitive for the past several weeks.

However, the decline in the prices at all other origins has been marginal and the prices of Asta grade pepper continued to rule above the Indian parity. Reports of short supply during the current year appear to be keeping other origins firm.

In spite of the fact that the fundamentals in the world market continued to remain without much changes the downfall continued in the Indian futures market. Bearish cartels have been consistently pushing the prices down and that might benefit the overseas buyers. Even exporters in some of the other origins bought MG 1 from India during the week.

“It is not a healthy sign and is working against the interests of the farmers and the trade in the country,” market observers alleged. The high volatility in the market is closely watched by buyers overseas.

NCDEX contracts

All the contracts on NCDEX during the week dropped by Rs 601 to Rs 819 a quintal while on NMCE it fell by Rs 445 to Rs 560 a quintal.

The total open interest on NCDEX moved up by 795 tonnes to 26,036 tonnes while on NMCE it went up by 208 tonnes to 2,612 tonnes. August position on NCDEX fell by 1,002 tonnes to 5,996 tonnes while on NMCE it declined by 115 tonnes to 1,313 tonnes.

The total turnover on NCDEX increased by 31,317 tonnes to 1,36,749 tonnes during the week while on NMCE it went up by 3,213 tonnes to 10,866 tonnes.

August and September prices remained below spot prices on the exchanges. Spot prices dropped by Rs 400 a quintal during the week to close at Rs 13,200 (un-garbled) and Rs 13,800 (MG 1) at the weekend close. The certified stock held by the exchanges is estimated at around 13,000 tonnes.

Given the reported tight supply position ahead and with the fundamentals remaining almost unchanged every decline in the Indian prices is advantageous to the buyers. However, the growers do not seem to part with their produce at the prevailing prices. As a result, the operators in the primary markets said to be finding it difficult to get replacements.

According to International Pepper Community (IPC) report for the week the overall black pepper market showed declining trend and prices eased further due to lack of overseas demand. Although there were some activities in the local market, spot prices at Kochi fell by around 3-5 per cent and futures prices declined by 7-8 per cent.

Trading at the Commodity Exchange was seen to be more active, particularly for September’s contract. In Vietnam, the market was quiet. Prices at Daklak for raw material declined from VND 50,000 a kg to VND 48,000 a kg at the week’s close.

In Lampung, the average prices of pepper at farm level eased IDR1,000 to close at IDR30,000 a kg this week. In Sarawak, black pepper prices eased marginally by 1 per cent locally and 2 per cent FOB

WHITE PEPPER

The market for white pepper was also quiet. In Bangka, local price eased marginally to around IDR 39,000 a kg from IDR 40,000 last week. In dollar terms, however, the decrease was four per cent due to weakening of the rupiah against US dollar.

In Sarawak, white pepper prices were stable but in dollar term the local prices eased marginally by one per cent due to dollar appreciation against Malaysian ringgit. In Hainan also, the prices eased by 2 per cent.