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G K Nair

Kochi, Sept. 5 Indian pepper futures market witnessed an upward trend for the second day on Wednesday on reports of firm international market and increase in Indonesian prices.

Buying interest was reported from the US and the Europe, while players were positioning themselves to take delivery here. In fact, the futures market has corrected itself signalling that unrealistic levels can’t sustain for long, market sources told Business Line. Futures prices have moved above the spot.

They said firmer international market was also influencing the market. The latest projections of output in Brazil reportedly put at 25,000 tonnes as against the earlier estimates of 35,000 – 40,000 tonnes.

A tight supply position seems emerging. Indonesia has raised its prices for LASTA to $3,650-$3,700 a tonnes (f.o.b) while Brazil was offering B Asta at $3,400 a tonnes (f.o.b) and in addition it would have extra processing cost for the US. Vietnam has quoted $3,500 a tonnes (f.o.b) for Asta grade. But there were no sellers. Indian parity on Wednesday was at $3,625 a tonnes (c&f) and thus remained still competitive.

Market sources said European players who had already covered seem to have become bullish now. It was reported that rumours were in Brazil that US traders had bought Asta grade from there at $3,400 a tonnes (fob) “under special financial arrangements”

September contract on NCDEX on Wednesday increased by Rs 269 a quintal to Rs 12,655. The increase in other contracts was from Rs 294 to Rs 371 a quintal.

On NMCE September contract moved up by Rs 271 a quintal to Rs 12,530. The rise in other contracts was from Rs 129 to Rs 375 a quintal.

The total turnover on NCDEX increased by 5,922 tonnes to 32,971 tonnes. The increase for September and October was 10 per cent and 78 per cent. On NMCE, the total turnover went up by 1,350 tonnes to 4,214 tonnes.

The total open interest on NCDEX increased by 482 tonnes to 23,673 tonnes. September position dropped by 24 per cent while October increased by 48 per cent.

The stock position on NCDEX was at 7,000 tonnes, while the open interest for September and October was at 5,720 tonnes and 11,260 tonnes respectively.

Total open interest on NMCE declined by 152 tonnes to 2,304 tonnes. September and October position dropped by 83 tonnes and 72 tonnes respectively to 487 tonnes and 1,641 tonnes. The spot prices in tandem with the upward trend in the futures market shot up by Rs 300 a quintal on Wednesday to close at Rs 12,200 (un-garbled) and Rs 12,800 (MG 1).

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