The Hindu Business Line : Strong fundamentals prop up pepper futures

Kochi, Oct. 10 The turmoil in the capital markets all over the world failed to influence the pepper futures market because of strong fundamentals of pepper like gold. The market moved up on Friday. October contract increased by Rs 231 a quintal to Rs 12,935. November an December went up by Rs 171 and Rs 141 respectively to Rs 13,000 and Rs 13,170 a quintal. The sales of those, aimed at depressing the market, were purchased by the investors. Thus, futures were easy and ready in demand, market sources told Business Line.

Turnover up

Total turnover on NCDEX increased by 969 tonnes to 7,440 tonnes. Net open position for October fell by 574 tonnes to 4,778 tonnes. November and December positions moved up by 133 tonnes and 442 tonnes to 7,458 tonnes and 3,903 tonnes respectively.

Total open interest dropped by 256 tonnes to 17,369 tonnes. The investors who were buying spot and selling futures earlier are now on the reverse mode liquidating spot and buying futures. The buyers said to have adopted a wait and watch approach anticipating that the prices would fall following the stock market crash world over.

Weakening of the rupee has nullified the impact of rise in the futures market prices. Indian parity on Friday was at $2,975-3,000 a tonne (c&f) for Europe and $3,100 a tonne (c&f) for the US. In fact, selected end users from selected pockets in the overseas markets, who prefer MG 1 were covering from India. Sharp fall in the value of rupee against the dollar has made imports of pepper costly, market sources said. In August last 1,295 tonnes of black pepper were imported through Kochi port alone, they said.

Spot prices on good buying support and in tandem with the futures market trend moved up by Rs 100 a quintal to close at Rs 13,000 (un-garbled) and Rs 13,600 (MG 1) on Friday, much above the first three deliveries on NCDEX.

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