The Hindu Business Line : Pepper futures market crashes on bearish operations

Kochi, Sept. 10 Pepper futures market crashed on Wednesday on bearish operations and in line with the sharp fall in other commodities across the board. Most of the contracts touched the second circuit and the drop was above Rs 500 a quintal. “Commodities’ Funds are playing a vital role in pushing down the market to allegedly to please the government to contain inflation”, market sources told Business Line. September contract on NCDEX fell by Rs 527 to close at Rs 12,659. October and November fell by Rs 538 and Rs 548 to close at Rs 12,914 and Rs 13,156 a quintal respectively.

Turnover increases

Total turnover increased by 2,169 tonnes to 7,769 tonnes while the total open interest fell by 181 tonnes to 19,538 tonnes. Spot prices also in tandem with the futures market trend fell by Rs 400 a quintal to close at Rs 12,800 (un-garbled) and Rs 13,400 (MG 1).

Sharp fall in the prices coupled with the weakening of the rupee against dollar has brought down the Indian parity to $3,075 a tonne (c&f) to Europe and $3,200 a tonne for US.

Exporters as well as hedgers fear to enter the market since exchange officials themselves have said "this is not a platform for delivery", they said. This means in the present market someone who hedges his overseas sales in the futures market and opts for delivery since future deliveries are trading much below spot prices, the seller can simply get away by paying 2.5 per cent penalty. According to overseas reports the prices quoted C&F New York were MG1 Asta was $ 3,300 c&f New York. L Asta $3,500-3,600 a tonne (fob). Vietnam Asta $3,100 atonne (c&f) New York.

Brazil Asta was being offered at $2,600 a tonne (f.o.b.) and B1 at $2,550 a tonne (f.o.b.).Vietnam and Muntok white pepper were quoted at $4,400 and $4,825-4,850 a tonne respectively.

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