The Hindu Business Line : Bears pull down pepper futures

People were not coming forward to take delivery from the exchanges despite low prices as they believe that the material is of substandard quality. Some of the unscrupulous depositors allegedly managed to get substandard materials in to the exchange and offering it to investors cheaper as exchange delivered pepper.

The situation appears to be unhealthy, market sources told Business Line. People did not have confidence in the exchange goods, they said. “We have only 45,000 tonnes production and it equals the domestic consumption while the carried forward stock is in strong hands and hence it is unlikely to come out. In the international market buyers are waiting for the Vietnam prices to drop. Meanwhile, as new buyers started appearing on the market, V Asta was being offered at $4,050 a tonne (c&f) New York. Indonesia has quoted L Asta at $3775 (f.o.b.), while Brazil was offering B Asta at $3,650-3,675 a tonne (f.o.b.). Indian parity is at $3,775 a tonne (c&f).

Vietnam was offering 500 GL at $3,425 a tonne (f.o.b.), while 550 GL at $3,625 a tonne (f.o.b.).

Feburary contract on NCDEX which matured on Wednesday, dropped by Rs 117 a quintal to Rs 13,949. All other contracts except June moved up marginally by Rs 5 to Rs 65 a quintal. June declined by Rs 15 a quintal.

On NMCE, March contract declined by Rs 28 to Rs 14,120. The drop in all other contracts was from Rs 6 to Rs 350 a quintal.

Open interest

Total open interest on NCDEX moved up by 188 tonnes to 19,893 tonnes. February position moved up by 5 per cent while March dropped by 55 per cent. April position moved up by 31 per cent. On NMCE, total open interest declined by 66 per cent to 1,704 tonnes.

Spot prices ruled steady at previous levels on Wednesday at Rs 13,400 (un-garbled) and Rs 14,000 (MG 1) a quintal.

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