The Hindu Business Line : Upward run continues in pepper futures

February and March increased by Rs 456 and Rs 457 respectively to close at Rs 11,790 and Rs 11,851 a quintal. The increase in other contracts was from Rs 454 to Rs 903 a quintal.

The increase on NMCE was from Rs 399 to Rs 762 a quintal for all the contracts during the week.

TURNOVER UP

Total turn over increased by 19,835 tonnes to close at 39,015 tonnes.

Total open interest moved up by 286 tonnes to close at 8,191 tonnes.

January open interest dropped by 887 tonnes to 2,210 tonnes while February and March increased by 846 tonnes and 325 tonnes respectively to 4,214 tonnes and 1,457 tonnes on NCDEX.

Spot prices also shot up during the week by Rs 500 a quintal to close last weekend at Rs 11,300 (un-garbled) and Rs 11,800 (MG 1).

GLOBAL SCENARIO

Activities in the international market commenced only from January 5 and the US and European markets are yet to become active. Buyers are yet to enter the market as they are reportedly waiting for the prices to decline. Prices of other origins are also ruling high in line with the upward trend in the Indian futures market. Indian parity remained at $2,700-2,750 a tonne (c&f) while all other origins are either at par with the Indian parity or marginally higher.

Availability in Indian exchanges as well as other origins is very limited and such a situation is likely to persist till the new Vietnam crop hits the market by March-end, market sources told Business Line. Valid stock available with the exchanges here is estimated to be below 1,000 tonnes which the quantity of validity expired stock is anybody’s guess.

NEW CROP THIN

Arrival of new crop from the growing areas of Kerala continued to remain thin. The crop in southern districts of Kerala is said to be lower by 40 per cent. The situation in Idukki and Wayand districts is also reportedly not different. Those farmers who can afford to hold back their produce till the price improves are not releasing their stocks of new and old crop.

Growers in Kerala’s southern districts told Business Line that the current price of black pepper was not remunerative. The cost of production, they claimed, has gone up due to higher labour cost. Wages of a worker which was Rs 75 a day when the price of the pepper was at Rs 50 kg has gone up to Rs 250-300 a day while the price of the commodity has increased only to Rs 100 a kg. Given this scenario harvesting of the matured pepper has become a costly affair, growers in Kerala’s Kollam, Pathanamthitta and Idukki districts said. Very low productivity (yield) a hectare has propelled the cost of production high.

In Karnataka where pepper is grown as intercrop with coffee the cost of production is comparatively low. The new crop from there will hit the markets in March.

Indian domestic demand continued to be good because of the severe winter in north India. However, the truckers strike has slowed down the movement of goods leading to a slow down in demand.

The prevailing situation as far as global availability is concerned is reportedly tight and hence there is every possibility of the prices to move up in the coming weeks, i.e., till the arrival of the new Vietnam crop in the markets, they said.