The Hindu Business Line : Pepper drops for want of buying support

Pepper futures market during the week witnessed high volatility with nearby deliveries from November to February dropping by Rs 264 to Rs 20 a quintal at the weekend close. March and April showed an increase of Rs 212 and Rs 134 a quintal respectively.

Indian parity has moved up to close at $2,600-2,700 a tonne (c&f) and still remaining competitive. Vietnam has reportedly quoted $2,700 a tonne (f.o.b.).

International buyers are on a wait-and-watch mode and closely monitoring the futures market trend in India, market sources told Business Line. Tight supply position is experienced while the credit squeeze world over has slowed down activities though the requirements for the coming months of several consuming nations are yet to be covered.

In India, the stocks held by the exchanges are estimated to be below 3,500 tonnes. The farmers and dealers holding iron stocks are reluctant to part with it at the prevailing prices.

The domestic demand is said to be so strong in view of the winter months that primary market operators are covering from the exchanges. Investors were selling spot and buying back futures.

November contract on Saturday was closed at Rs 11,600 a quintal while December and January at Rs 11,357 and Rs 11,540 a quintal respectively on NCDEX. On NMCE, the fall was from Rs 189 to Rs 241 a quintal.

Total turn over dropped by 739 tonnes to 36,184 tonnes. Total open interest fell by 1,325 tonnes to 13,213 tonnes at the weekend close.

Spot prices also in tandem with the futures market trend declined by Rs 200 a quintal to close on Saturday at Rs 10,900 (un-garbled) and Rs 11,500 (MG 1).

NY prices quoted for various origins at the weekend were Vietnam Asta $2,875 (c&f) New York and MG 1 at $2,700-2,800 a tonne (c&f). Brazil B Asta was quoted at $2,300 (f.o.b.) while Lampong Asta at $3,000 a tonne. MSLV Asta was quoted at $2,950 a tonne NY ex-warehouse while MSLV Asta Jun – Sep were being affered at $2,750-2,850 a tonne (c&f) USA.

White pepper prices quoted by Vietnam was $3,900-3,950; Brazil $4,200 (f.o.b.) and Muntok $4,300 (c&f) USA.

Quiet market

According to International Pepper Community (IPC), the black pepper market continued to be quiet as global demand, affected by the economic turmoil, had dropped.

Overseas buyers are keeping their inventory at minimum level and buying in smaller lots. In India, trading continued to be quiet. Some activities, however, took place for December contracts. Prices of Malabar black in India were down slightly from last week. In dollar terms, however, the price increased due to stronger Indian currency against the dollar during the week under review.

In Lampung, local prices stood at around IDR 22,000 a kg, same as last week’s level. In dollar terms, however, the price eased due to weakening IDR against dollar. In Sarawak, local price of black pepper also eased marginally, while f.o.b. prices were reported stable at $3,200 a tonne. In Sri Lanka, average pepper price at growing areas was down by six per cent.

WHITE PEPPER

The market for white pepper was also quiet. In Bangka and Sarawak, local prices eased further.

36TH SESSION OF IPC- 2008

More than 150 delegates from 20 countries — Australia, Belgium, Bulgaria, Brazil, China, France, Ghana, India, Indonesia, Italy, Japan, Malaysia, the Netherlands, Saudi Arabia, Singapore, Sri Lanka, Taiwan, Ukraine, United Arab Emirates and Vietnam — as well as representatives from ASTA, ESA, IGPA and UN FAO have registered for the 36th Session of IPC to be held at Rex Hotel Ho Chi Minh City, Vietnam, from Nov 24–27, IPC sources said.