The Hindu Business Line : Pepper likely to recover in early Jan

The pepper futures market during the week witnessed a sharp fall in the prices of all contracts for want of buying support due to holidays in the international market on account of Christmas. The coming days are also likely to be inactive as the markets would become lively only after the New Year holidays from January 5. Till then, prices are likely to experience a downward trend.

Availability

Availability in the world market continues to remain tight and the only source for quality pepper is India, albeit in limited quantity. Thin stocks are available with the exchanges while rich farmers are holding back stocks. But, they are reluctant to release at the prevailing prices which they claim is not remunerative. Meanwhile, what is available in Brazil, at present, is reportedly require processing, which is considered to be a costly affair.

Good demand

Therefore, the overseas buyers, especially from selective pockets in foreign markets who prefer MG 1 and others who have to cover to meet their commitments, might turn towards India after the holidays. On the other hand, the new crop from Vietnam would hit the market in late March/early April 2009. Hence, there is every possibility of orders coming to India in the coming weeks to cover for the requirements till the new Vietnam pepper becomes available, market sources told Business Line. Add to this, the domestic demand is also said to be good.

Arrivals

No pepper is arriving from the primary markets at the terminal market. Only the investors were liquidating and buying back their sales. Some were unwinding their future positions so as to get out of the exchanges, having lost interest, they said.

Given this scenario, the prices of pepper are likely to recover from the second week of the New Year.

Downtrend

During the week, January contract witnessed a sharp fall of Rs 416 a quintal to close at Rs 9,870 on NCDEX.

The fall in other contracts was from Rs 413 to Rs 489 a quintal.

On NMCE January contract dropped by Rs 327 a quintal to close at Rs 9,910 on Saturday.

Total turn over on NCDEX during the week fell by 2,601 tonnes to close at the weekend at 15,598 tonnes.

Total open interest moved up by 62 tonnes to 8,351 tonnes.

Open interest for Janury dropped by 626 tonnes to 4,228 tonnes on NCDEX.

Spot prices during the week declined by Rs100 a quintal in tandem with the futures market trend to close at the weekend at Rs 9,700 (un-garbled) and Rs 10,200 (MG 1) on Saturday.