The Hindu Business Line : Speculation keeps pepper futures hot

Kochi, Feb. 28 Pepper futures market continued to increase on excessive speculation on Thursday as the prices in all other origins are also on an upsurge.

Investors, processors who had sold to investors and exporters with multi-origin operations bought pepper and as a result 150 tonnes of the commodity were traded. Investors were selling futures and buying spot exchange delivered pepper.

Difference in the prices of two main exchanges indicates that the pressure is on one exchange only, market sources told Business Line.

Indian parity has gone up to $4,200 a tonne (c&f) and at par with that of Indonesia. Vietnam was not offering Asta grade as they did not want to sell heavy pepper, they said.

According to overseas reports the international market is very firm with fresh buying interest at $4,050 a tonne (c&f) New York for March/June shipment.

Prices continued its upward run with Lasta being offered at $4,100 a tonne (f.o.b.) while Brazil B 1 at $3,800 a tonne (f.o.b.). This was being offered at $3,700 a tonne (f.o.b.) on Wednesday.

Vietnam with prices above the Indian and Indonesian levels is now out of the market.

Meanwhile, Brazil Pepper Trade Board said “Pepper exploding again in all origins and Brazil was the cheapest until today (Wednesday)”.

However, it said, the dollar rate continues to slide down and exporters are feeling the market firm. So the trend is to increase the prices.

Domestic demand has slowed down significantly following the sharp rise in the prices.

CONTRACT POSITION

March contract on NCDEX on Thursday increased by Rs 187 a quintal to Rs 15,780. The increase in other contracts was from Rs 91 to Rs 197 a quintal.

On NMCE, March contract shot up by Rs 224 a quintal to Rs 15,390. The rise in other contracts except July was from Rs 89 to Rs 237 a quintal. July contract fell by Rs 240 a quintal. Total turnover on NCDEX increased by 2,282 tonnes to 23,234 tonnes, while that of NMCE went up by 101 tonnes to 2,166 tonnes.

Total open interest on NCDEX increased by 603 tonnes to 24,205 tonnes. March position dropped by 24 per cent while April and May moved up by 63 per cent and 6 per cent respectively.

Spot prices on tight supply and in tandem with the futures market trend shot up by Rs 200 a quintal on Thursday to close at Rs 14,700 (un-garbled) and Rs 15,300 (MG 1).

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