The Hindu Business Line : Fluid situation prevails in pepper market

“In fact, they are manipulating the market without any connection with the fundamentals. It is sending out wrong signals to the overseas markets and to the farmers here,” market sources told Business Line.

Buyers, both domestic and overseas, have taken a wait-and-watch approach, they said.

Good demand

All the contracts on NCDEX fell by Rs 405 to Rs 510 a quintal during the week from the prices of previous weekend close. On NMCE it was from Rs 362 to Rs 468 a quintal.

Total turnover on NCDEX dropped by 2,914 tonne to 33,460 tonne, while total open interest just moved up by 14 tonnes to 20,005 tonnes at Saturday’s close.

There was no selling pressure on spot and the prices therefore ruled steady at the previous weekend’s close of Rs 13,600 (un-garbled) and Rs 14,200 (MG 1) a quintal.

Spot prices remained below the September prices of Rs 14,016 on NCDEX on Saturday. There had been good demand from the upcountry buyers, who were said to be covering from the primary markets directly.

Reports from the international market said that the market was by and large inactive.

Indonesia was waiting for their new crop to arrive. Even though Brazil was easier not much demand was reportedly going there. Vietnam also was easier.

Many of the international operators feel that the market would become stronger, even though the prices in India are under pressure and it is unlikely to contribute to a firmer international market.

Availability in the international market is likely to be limited in the coming months and till the next Vietnam crop arrives in the market in March/April 2009.

The current carryover stock in Vietnam, according to reports, is estimated to be less than 10,000 tonne.

Brazilian Pepper

Indonesian crop harvesting of which has been delayed is likely to be around 15,000 tonnes.

The Brazilian crop is going to be 35,000 tonnes. Thus, the availability for the next six months might not be sufficient to meet the demand, market sources told Business Line.

Therefore, the demand could move up from next month, they said.

The low prices in Brazil could pave the way for Brazilian pepper arriving in India for grinding, value addition and re-export. It might also land up in Vietnam for processing and re-export, they claimed.

Inferior quality

It is at this time the bear operators are pulling down the futures market.

On the other hand, despite the availability of the material at the exchanges at prices much below the spot, exporters are not willing to take delivery on fear of its inferior quality.