The Hindu Business Line : Bears pull down pepper futures a tad

The futures market, of late, is witnessing high volatility with the prices shooting up and falling sharply in the exchange resultant from alleged tug of war between the bulls and bears following the introduction of a curb on the nearby month position.

Restricting the nearby month position has badly affected hedging and the genuine hedgers have been put in to great difficulty, market sources told Business Line. Exporters said that they were finding it difficult to cover.

The futures market has been giving unrealistic figures with no convergence with spot and the future. Futures dropped below the ready market prices. This has influenced the prices in other origins.

In fact, no other producing country has the hedging facility and yet “we are not able to make use of this facility of late”, they pointed out.

The country is having good chances to export but that is being hampered and if it continued, they claimed, “we might be deprived of the exports of 1,500 tonne”. The Union Commerce ministry and the Spices Board appear to have become silent spectators, he alleged.

In the international market Vietnam prices for 500 GL moved up last Friday from $2,950 to $3,000-3,050 a tonne (f.o.b.), while Brazil Asta was closed at $3,375 a tonne (f.o.b.). L Asta was quoted at $3,500 a tonne (f.o.b.). Indian parity is also at around this level, they said.

CONTRACT POSITION

September contract on NCDEX declined by Rs 53 a quintal on Monday to Rs 11,965. The drop in other contracts was from Rs 62 to Rs 131 a quintal.

On NMCE September contract, however, moved up by Rs 130 to Rs 11,949. sOctober went up by Rs 6, while the drop in other contracts was from Rs 88 to Rs 415 a quintal.

The total turnover on NCDEX fell by 4,255 tonnes to 23,442 tonnes, while the drop in September and October was by 10 per cent and 80 per cent respectively.

On NMCE total turnover declined by 73 tonnes to 3,066 tonnes.

The total open interest on NCDEX moved up by 62 tonnes to 23,291 tonnes.

September and October positions dropped by 28 per cent and 46 per cent.

On NMCE the total open interest increased by 333 tonnes to 2,556 tonnes. September and October moved up by 86 tonnes and 248 tonnes.

Spot price

Spot prices in tandem with the futures market trend dropped by Rs 100 a quintal to close at Rs 11,900 (un-garbled) and Rs 12,500 (MG 1) on Monday.

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