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Good demand: A file picture of black pepper.

G.K. Nair

Kochi, Nov. 23 Pepper futures market, which has witnessed high volatility during the week, closed marginally higher at the weekend. November contract moved up by Rs 155 a quintal to close at Rs 11,580.

December and May remained unchanged at Rs 11,636 and Rs 12,155 a quintal. January, February, March and April went up by Rs 70, Rs 25, Rs 69 and Rs 35 a quintal respectively to Rs 11,754, Rs 11,813, Rs 11,994 and Rs 12,075.

Total turnover increased by 10,209 tonnes to 35,051 tonnes. Total open interest dropped by 643 tonnes to 12,196 tonnes.

Spot prices also moved up by Rs 100 at the weekend to close at Rs 11,300 (un-garbled) and Rs 11,800 (MG 1).

Good domestic demand has compelled primary market operators to buy from the exchanges to meet their commitments. Similarly, exporters and others also had to depend on investors who were liquidating validity expired stocks at discounts.

Indian parity remained at competitive rates at $2,600-2,700 a tonne (c&f), despite the rise in futures prices because of the sharp fall in the value of rupee against the dollar.

Availability of physical pepper is confined at present to the exchanges. Non-availability in the primary markets is evident from the buying interest shown by the operators in that market in the exchange. The grinding industry and other dealers in the upcountry markets were covering for the winter months keeping domestic prices at higher levels.

The market is also said to have witnessed the primary market dealers selling to exporters at a premium, validity expired materials bought from investors at a discount, signaling a probable credit squeeze resultant from the current recession.

In the international market, all buyers were quiet and on a wait-and-watch mode. The major hurdle before them is said to be the credit squeeze following the economic recession world over.

However, pepper being a food ingredient, a sharp fall in demand is unlikely.

On the other hand, the supply channel at present remains tight and, hence, prices are expected to rule steady to firm, market sources told Business Line.

The prices of various origins quoted on Friday were V Asta $2,875 a tonne (c&f) New York; MG1 Asta $2650 a tonne (c&f) NY; Ecuador Asta $2,600 a tonne (c&f) NY; Brazil Asta $2,200 a tonne (f.o.b.), B1 $2,125 (f.o.b.); MSLV Asta $2,925-2,950 spot New York/NJ and MSLVB Asta $2,950-3,000 a tonne (c&f) USA Jan/Feb/Mar 2009.

Vietnam and Muntok white pepper were quoted at $3,900 and $3,850 a tonne (c&f) New York respectively.

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