The Hindu Business Line : Pepper prices likely to increase

The pepper market world over is showing signs of a tight supply situation, as the sellers were holding back, signalling a potential rise in prices in the coming days.

If the current reports emanating from the overseas sources turned out to be real, then one could reach the conjecture that there is going to be a tightness in availability. Sellers both growers and traders in several origins are said to be holding back the produce.

According to an overseas report, on Saturday, the Asian pepper market has been trading in a rather static range this week. However, Brazil just opened substantially higher, with B1 quoted at $2,850 (fob). “We understand that the crop has almost finished and the pepper is getting in stronger hands now. Also buying from the US was reported which helped to push the values up”.

Meanwhile, another report said “Vietnam increased their offers daily, as their remaining stocks are being depleted”. The situation in Indonesia is also reported to be not different and it is evident from the firm prices for Lampong Asta during the week, trading sources pointed out.

A tight supply position continued to prevail in India also. When the domestic demand started emerging the prices shot up during the week due to thin arrivals, trading sources told Business Line.

The major consuming centres in Northern India such as Delhi, Jaipur, Gwalior, Indore and Mumbai which cater to the other markets in the entire region were said to have empty pipeline and hence covering actively for their winter requirements. “In fact, the market witnessed robust demand from these main trading centres in North India”, they said.

Arrivals in the primary markets were very thin as the growers were reluctant to part with their produce at the current levels. They were anticipating the prices to move up in the coming days.

“Over all trend was firm”, market sources told Business Line. Domestic demand continued to remain good. Some “origin specific buyers from Europe and the US” were showing interest to buy MG 1, they said. Both the futures and the spot market in India witnessed an upward trend during the week with all the contracts on NCDEX moving up. November, December and January contracts shot up by Rs 768, Rs 807 and Rs 761 a quintal respectively to close on Saturday at Rs 15,024, Rs15,240 and Rs15,330 a quintal.

The total turnover increased by 24,464 tonnes to 48,099 tonnes. November and December turnover went up by 12,061 tonnes and 12,049 tonnes respectively during the week.

Total open interest moved up by 838 tonnes to 10,187 tonnes. November open interest dropped by 1,482 tonnes while that of December increased by 2,113 tonnes and January by 187 tonnes. Spot prices on strong domestic demand during the week shot up by Rs 600 a quintal to close at the weekend at Rs14,100 (ungarbled) and Rs14,600(MG 1).

Indian parity on Saturday is at $3,350 – $3,400 a tonne. Prices quoted for different origins per tonne c&f New York were MG 1Asta: $3,400-$3,500; Vietnam Asta: $3,275-$3,300; Lampong Asta:$3,225; Brazil Asta $2,900 - $2,950 (fob); Vietnam 500 FAQ at $2,700 and 550 GAQ $ 2,850 (FOB); Brazil B1 and B2 at $2,850 and $2,750 (fob) respectively.

White pepper prices quoted were Vietnam double washed: $4,350-$4,400; Muntok: $5,000-$5,100; and Brazil: $4,500 a tonne (fob).