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G.K. Nair

Kochi, Nov. 2 Indian pepper has become competitive, with the decline in the futures prices and the continuous depreciation of the rupee against the dollar.

Last week, the November and December contracts improved by Rs 128 and Rs 3 a quintal to close at Rs 11,500 and Rs 11,465 respectively.

All the other contracts dropped by Rs 2-316 a quintal on NCDEX. Drop in prices on NMCE ranged from Rs 146 to 325 a quintal.

Total volume moved up by 4,266 tonnes to 36,923 tonnes. Total open interest dropped by 292 tonnes to 14,538 tonnes. November open interest fell by 1,209 tonnes. Spot prices fell by Rs 300 a quintal during the week to close at Rs 11,100 (un-garbled) and Rs 11,700 (MG 1) a quintal at Saturday close. However, the MG 1 spot price ruled above the first four contracts, market sources told Business Line.

As some of the major consuming countries such as the US are yet to take steps to meet their pepper requirements, demand is likely to emerge from these markets in the coming days.

Some business is said to have already taken place at the weekend. Thus, buying support pushed up the prices of all the contracts on Saturday, the sources said.

On the other hand, now there is a squeeze in supply. Availability is said to be only in Brazil and India. In Brazil, the market has become active and reported to have traded B Asta at $2,300 a tonne (f.o.b.) late this week. “However, prices there too are across-the-board depending on suppliers,” an overseas report said.

Indonesia, which has a short crop this year, is reported to have sold out the current crop. Lampong Asta is being quoted at higher levels.

In India, investors were buying back futures and selling spot. Exporters and domestic dealers were covering from the exchanges. Buying support has pushed up the prices of November delivery while all other contracts fell.

According to the International Pepper Community (IPC), the world pepper market remained quiet last week consequent to the global economic turmoil. It has “affected demand for spices, particularly black pepper, in the US and European countries”.

In India, trading was very quiet. Some activities took place during the week, particularly for December contracts. The situation was due to very limited stock coupled with weak overseas demand.

Prices of Malabar black in India declined significantly by around around per cent compared to the previous week. In Lampung, the market was also quiet. Local prices were reported at around IDR 22,000 a kg. This was slightly lower compared to the previous week. In dollar terms, however, prices dropped sharply by 13 per cent due to significant fall of the rupiah against the dollar.

In Sarawak, local price of black pepper eased further by 1 per cent, while f.o.b. prices dropped significantly by $500 a tonne from $3,700 during last week to $3,200 this week.

In Sri Lanka, the price was up marginally by one per cent.

The market for white pepper was also quiet. In Bangka and Sarawak, local prices eased marginally. In dollar terms, however, local prices in Bangka dropped significantly by 11 per cent. In Hainan, the prices eased by eight per cent.

Indonesian exports this year are estimated to be higher than that of 2007. Last year, Indonesia exported 22,500 tonnes of black pepper valued at $64.2 million. During January – August 2008, it has exported from Lampung port 27,156 tonnes valued at $84.14 million. The export was mainly from last year’s carryover stock. Entering the second semester, however, the export showed a decline, reflecting a significant fall of recent crop in Lampung.

More Stories on : Spices & Condiments | Derivatives Markets

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