The Hindu Business Line : Buying support helps pepper futures recover

Besides, positive trend in the stock market, pulling out of Indonesia from the selling spree and the indication that the regulator would take a favourable decision on the nearby month position, all have contributed to the ‘U’ turn, market sources told Business Line.

Genuine reasons

The continuous decline in futures prices in recent days does not seem to be based on any genuine reasons. The arrival pattern, of late, was showing that there was not much material left at the farm level and as a consequence the primary market prices were ruling above the futures market.

On the other hand, the domestic demand, which has been sluggish due to heavy rains and floods in North India, would pick up now due to the ensuing festival and winter season as the grinding industry would be gearing up production.

All these factors have now led to a correction in the market, they said.

The FMC is reportedly considering an upward revision in the near-month position limits for exporters, but no decision has yet emanated in this regard.

The exporters have been complaining that with such low limits, they were forced to reverse their positions before the contract becomes near-month.

Global scenario

In the international market, Vietnam had not reduced the prices of its Asta Grade. Besides, the Indonesian current crop is said to be not good.

However, some activity is reported to have taken place. But, nobody appeared to be ready to reduce the prices of Asta grade pepper. Indonesian sellers were said to be hesitant to sell at $3,550 (f.o.b). Indian parity was also at $,3550 a tonne (c&f). Brazil was offering Asta grade at $3,400 a tonne (f.o.b).

CONTRACT POSITION

September contract, on NCDEX, on Friday shot up by Rs 707 a quintal to Rs 12,485. The increase in other contracts was from Rs 718 to Rs 752 a quintal.

On NMCE, September contract increased by Rs 704 a quintal to Rs 12,442. The rise in other contracts was from Rs 453 to Rs 731 a quintal.

The total turnover on NCDEX increased by 8,622 tonnes to 25,914 tonnes, while on NMCE it went up by 1,308 tonnes to 2,840 tonnes.

Spot prices in tandem with the futures market trend went up by Rs 200 a quintal on Friday to close at Rs 12,100 (un-garbled) and Rs 12,700 (MG 1).

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