The Hindu Business Line : Downtrend in pepper futures

The week witnessed a sharp decline in the pepper futures market on bearish operations and entry of imported pepper in the domestic market. The current scenario is likely to continue till the new crop position of Indonesia becomes known.

Good selling pressure was reported early last week in the primary markets also for fear of further drop in the prices due to increased availability of imported pepper in the upcountry markets.

Meanwhile, there were reports that Sri Lanka was offering at lower rates its medium grade matured pepper to Indian buyers who can import without paying import duty under the FTA.

Other origins

At the same time, pepper from other origins was reportedly trading at a discount. Domestic demand was slow. Experts predicted that price willfall until it reaches Rs 12,150 a quintal.

Onset of south-west monsoon has revived hopes for some improvement in the next pepper crop.

Prices of all the contracts on NCDEX and NMCE witnessed a sharp fall.

On the former, the fall was from Rs 574-654 a quintal. On Saturday, July contract closed at Rs 12,300 a quintal below the spot price.

On NMCE, the fall was from Rs 556 to Rs 700 a quintal and here the July contract closed at Rs 12,100 a quintal on Saturday.

Total turn over on NCDEX dropped by 620 tonnes to 11,749 tonnes at the weekend close.

Total open interest moved up 109 tonnes to 6,769 tonnes. July open interest fell by 567 tonnes while that of August and September moved up by 591 tonnes and 65 tonnes respectively.

Spot prices crashed by Rs 400 a quintal to close at Rs11,900 (un-garbled) and Rs 12,400 (MG 1) .

In the international market, Indian parity continued to rule above all other origins at $2,675 a quintal.

All other origins were offering at $2,300-2,400 a tonne (c&f). However, in Indonesia where harvesting has started, L Asta was said to be quoted at $2,300 a tonne (c&f).

IPC Report

According to the latest International Pepper Community report, at most origins, the market for black was calm, with the exception of Sarawak. Prices here increased steadily from around MYR 7,000 a tonne locally in early May to around MYR 8,000 at the end of June. The prices increased further to MYR 8,170 at the week’s close. F.O.B. price also increased to $3,500 a tonne.

In Vietnam, the prices were at VND 35,750 a kg locally. F.O.B. prices stood at $1,925 a tonne for black 500 GL and $2,025 for 550 GL.

In Lampung, local prices were reported stable with limited activity and in Sri Lanka, average price of black pepper was SLRs 231.00 a kg.

WHITE PEPPER

The market for white pepper continued to remain firm. Prices in Bangka and Vietnam were stable as last week. In Hainan, prices increased by two per cent. In Sarawak, local price increase was by six and eight per cent for f.o.b.