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G. K. Nair

Kochi, Sept. 8 The pepper futures market fell sharply on Monday on reports that other origins have eased considerably. Besides, there has been a propaganda that Vietnam is holding a stock of 35,000 tonnes of black pepper. In fact, it is the money power of the Indian speculators that has been bringing the market down. Buyers have been keeping away from the declining market. There has been good demand from the domestic market because of the festival season but it met by direct buying from the primary markets. It is not coming to the terminal market at all, market sources told Business Line.

September contract fell by Rs 358 a quintal to close at Rs 13,050 while October and November dropped by Rs 363 and Rs 372 to close at Rs 13,330 and Rs 13,587 a quintal respectively. The drop in other contracts was from Rs 338 to Rs 418 a quintal. All the first three contracts are now much below the spot price of Rs 13,800 a quintal for MG 1, which is not a healthy sign in the futures market trading, they said.

Net open position on NCDEX for September dropped by 378 tonnes while that of October and November moved up by 248 tonnes and 202 tonnes respectively. It shows that some of those holding September position have switched over to nearby positions. Total turnover increased by 2,469 tonnes to close at 7,757 tonnes while total open interest moved up by 17 tonnes to 19,969 tonnes. In tandem with the futures market trend, the spot prices also dropped by Rs 100 a quintal to close at Rs 13,200 (un-garbled) and Rs 13,800 (MG1) a quintal.

Indian parity has dropped to $3,200 a tonne (c&f). The international pepper market appears to have eased considerably following reports that Brazil Asta was traded at $2,650 f.o.b. (September/October) while Vietnam Asta is quoted at present at $3,250-$3,275 a tonne C&F New York (September/ October).Trading on both black and white remains limited, as Brazil and Vietnam have been pushing for sales, and the more competitive quotes are causing buyers to become cautious.

The stronger dollar is certainly playing a role as well. Brazil is reportedly the most aggressive and according to overseas market sources, the Brazilian crop though projected to be good, is likely to fall short of last year’s crop. But, more importantly, there were very few forward sales done earlier that need to be covered, they said. Vietnam, which had been holding back earlier this year, seems now to be aware that their new crop is not that far away and there still are good quantities of current crop to be sold.

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