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G.K. Nair

Kochi, Oct 6 The pepper futures market crashed for the second day on Monday on bearish activities. “The bears are pulling down the market by their muscle power even when the fundamentals remain unchanged,” trading sources alleged. It is happening at a time when there is said to be a tight supply position in all the origins and some major consuming countries are understood to have to cover their requirements for the last quarter of the year. “It is a tricky scenario,” they said.

October contract dropped by Rs 524 to Rs 12,594 a quintal much below the spot price of Rs 13,600 a quintal for MG 1 on NCDEX. November and December fell by Rs 531 and Rs 542 respectively to Rs 12,762 and Rs 13,024 a quintal, both also below the spot price. Instead of moving towards convergence with the spot, the futures prices for the first three deliveries are widening and it does not seem to be a healthy sign, market sources told Business Line.

Thus, Indian parity dropped to $2,975-3,000 a tonne (c&f). Vietnam, seemingly influenced by the trend in the Indian futures, reduced its pepper price by $100 a tonne, they said.

Total turnover moved up by 65 tonnes to 8,523 tonnes. Total open interest dropped by 218 tonnes to 18,035 tonnes. Net open position for October fell by 343 tonnes to 5,769 tonnes. November declined by 76 tonnes to 7,912 tonnes while December moved up by 198 tonnes to 3,145 tonnes.

The situation in the international market would be known on Tuesday. However, the Brazil Pepper Trade Board said on Sunday said the week for pepper trade in Brazil was a tough one. Dollar rate and stock exchange jumped up and down at rates of seven per cent a day as in all over the world. Unstable situation was the issue, it said. Import market disappeared with all holidays plus the lack of definition on US economic development. On Friday some enquiries appeared. Nevertheless, firm offer in such behaviour is a very risky deal. Serious sellers did not want to take this risk. Despite several publications abroad noticed, Brazil was never offering firm and prices such as 2,700 or 2,800 were merely nominal and informed by brokers with no real base or commitment. “We do believe that on Monday when markets will start to search normality Brazilian prices will be around $2,900-3,000. It was also reported that Vietnam eased prices in some $100. This may be a good deal if they ship,” it said.

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