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G.K. Nair

Kochi, Oct. 7 Pepper futures market, after continuous decline in the past few weeks, recovered during the week with the prices showing an increase on all the contracts ranging from Rs 554 to Rs 1,069 a quintal.

On NCDEX the increase was from Rs 913 to Rs 1,069 a quintal while on NMCE it was from Rs 554 to Rs 1,064 a quintal. At the weekend close all the long positions showed a step-by-step increase indicating buying interest for all the positions.

Total turnover on NCDEX increased by 6,900 tonnes to 79,784 tonnes during the week while that on NMCE went up by 2,096 tonnes to 7,074 tonnes.

Total open interest on NCDEX moved up by 269 tonnes to 20,152 tonnes while that for October dropped by 1,845 tonnes during the week. November and December positions increased by 585 tonnes and 1,255 tonnes respectively. On NMCE also open interest increased by 177 tonnes to 2,179 tonnes during the week. Spot prices in tandem with the futures market trend increased by Rs 400 a quintal during the week to 12,100 (un-garbled) and Rs 12,700 (MG 1). Squeeze in physical availability at almost all the origins including India coupled with potential rise in demand during winter and the ensuing Christmas season might push up the prices in the coming weeks. Brazilian crop this year is reportedly going to be less than what was originally anticipated. This has resulted in a shrink in supply. Indonesia, which does not indicate any interest in reducing the price, was said to be offering forward sales. Vietnam prices ruled steady with no offers for Asta grade.

India continues to remain still competitive. However, sellers were reluctant to offer because of fear that there would be a squeeze in availability in the coming months of the year following reduction in penalty structure by the exchange “for failure to meet delivery obligations by the market participants”.

Besides, with the dollar versus other currencies remaining weak non-US dollar buyers, such as the dealers in Europe, reported to have resorted to buying at reasonable prices during the past 10 days.

According to International Pepper Community report for the week, the overall market continued to be quiet. In India, trading at the commodity exchange showed some activities particularly for November and December contracts and prices moved up at the week’s close. However, compared with last week the price was relatively stable, but futures prices for November and December rose by 1 per cent.

In Vietnam prices were quite stable at VND 49,000 a kg for local purchases, $3,150 a tonne (fob) for black 500 GL and $3,300 a tonne (fob) for black 550 GL.

In Lampung, the average prices of pepper at farm level eased IDR 1,000 a kg to around IDR 24,000 a kg this week. In Sarawak local price of black pepper eased marginally, by 1 per cent and in Sri Lanka the price was reported stable.

The market for white pepper was also quiet. In Bangka local price eased marginally to around IDR 37,000 a kg from IDR 38,000 a kg last week. The decline was due to immediate cash need in anticipation of Lebaran holidays. In Sarawak, white pepper prices were relatively stable. In HCMC the price was also reported stable.

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