The Hindu Business Line : Pepper futures recover from last week’s fall

The turnover of exchanges dropped sharply during the week. On NCDEX it dropped by 24,943 tonnes to 54,716 tonnes while on NMCE it fell by 4,041 tonnes to 5,260 tonnes. Open interest on both the exchanges moved up marginally. Compared with last week’s spot, prices went up by Rs 100 a quintal to close at Rs 13,800 (un-garbled) and Rs 14,400 (MG 1). Tight supply position and good buying support is pointed out as the reason for the upward trend in the prices.

Exporters were covering from the terminal as well as the primary markets. There was good buying from the exchanges also. Export demand is said to be there, market sources told Business Line.

Offtake was low and arrivals were thin. However, exporters were buying spot to cover their February commitment. The severe cold wave conditions in North India pushed up the domestic demand. Grinding industry was active in buying. It is operating on full capacity as the grinding loss will be much less under the present upcountry weather conditions, they said.

Meanwhile, those who don’t prefer to take delivery were switching over to next positions. The squeeze in arrival might continue as those who had liquidated their stocks earlier when the prices were ruling high were now covering back, they said.

Selling Pressure

Quantity restrictions on nearby month position continued to put both exporters and investors in difficulty. In the international market, the buyers are on a wait-and-watch mode anticipating that there would be some selling pressure in Vietnam after the Chinese New Year holidays.

The only source now is India, till the Chinese new crop hits the market probably next month. The availability in Indonesia and Brazil is limited, they said. Brazil was the only cheapest source offering at $3,600 a tonne (fob).

Indian parity at present is at $3,900-$3,950 a tonne (c&f) and all others such as Indonesia and Vietnam are also offering at the same level, they added.

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