The Hindu Business Line : Pepper futures slip on drop in other origin prices

Kochi, Sept. 11 Pepper futures market continued its downward trend on Thursday also on bearish activities and on reports of prices easing in other origins–Vietnam and Brazil.

September contract dropped by Rs 133 a quintal to Rs 12,526. October and November fell by Rs 139 and Rs 155 a quintal to Rs 12,775 and Rs 13,001 respectively on NCDEX. All the three contracts fell to below the spot price of Rs 13,400 a quintal for MG 1.

The drop in other contracts was from Rs 42 to Rs 337 a quintal. The gap between the September contract and ready pepper price (MG 1) continues to widen and it is not a healthy sign, especially when it is nearing maturity, market sources told Business Line. Indian parity fell below $3,000 a tonne (c&f).

Banks are closed for two days on Thursday and Friday on account of Onam and it is also affecting the trade, they said. Total volume shot up by 3,585 tonnes to 11,354 tonnes, while total open interest dropped by 410 tonnes to 19,128 tonnes.

Those who are holding September positions said to have been liquidating/switching over to nearby positions. Open interest for September fell by 868 tonnes, while October and November moved up by 252 tonnes and 229 tonnes. There was no selling pressure on spot. Spot prices ruled steady at Wednesday’s prices of Rs 12,800 (un-garbled) and Rs 13,400 (MG 1) a quintal.

There is good domestic demand. But, domestic players are keeping away from the declining futures market. However, the demand is met directly from the primary markets.

In the international scenario Vietnam market was quiet and still some sellers were offering 500 GL FAQ at $2,550 a tonne (f.o.b.). Brazil reported to have offered B2 last night at $2,450 f.o.b.. US buyers had bid for B Asta at $2,600 a tonne (f.o.b.) but it was rejected. However, the sellers are appear to be ready to offer at $2,650-2,700 a tonne.

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