The Hindu Business Line : Pepper market down on selling pressure

PEPPER prices have begun to decline on selling pressure both in spot and futures market as Sri Lanka has started selling aggressively its new crop at $1,450 a tonne.

Spot prices dropped by Rs 200 a quintal on Tuesday, while the decline in futures was from Rs 251-394 a quintal.

MG 1 and ungarbled on Tuesday were sold at Rs 7,000 and Rs 6,700 a quintal respectively as against Rs 7,200 and Rs 6,900 during the weekend.

Futures were: Aug Rs 7,078 as against Rs 7,329 during the weekend; Sep Rs 7,258 (Rs 7,547); Oct Rs 7,313 (Rs 7,707); Nov Rs 7,425 (Rs 7,769); Dec Rs 7,409 (Rs 7,753) and Jan Rs 7,430 (Rs 7,736) a quintal.

Traders here fear that the North Indian markets would be flooded with Sri Lankan pepper, which could arrive in the domestic markets at Rs 67 a kg, while the domestic pepper would cost around Rs 72 a kg when it is transported to up-country markets.

Harvesting in Sri Lanka might even bring down the price, they said.

As a result, the domestic demand has also shown a downward trend.

On the other hand, the futures market also declined sharply on selling pressure as the bulls have started liquidating, they said.

"Those who bought blindly in the recent past are now on a selling spree," they said.

They also alleged that in the absence of strict monitoring mechanism to ensure that pepper imported for processing and re-export did not enter the domestic market, a substantial quantity of Vietnamese pepper was also available in the Indian market.

In the international market there is not much activity. There has been no demand for Indian pepper as it is outpriced at $1,625-1,650 a tonne. Indonesia was offering at $1,500-1,525 a tonne because of appreciation of its currency while Brazil was offering its new crop shipments in Sep/Oct $1,350 a tonne. Vietnam offers at $1,300-1,350 a tonne and it was being imported into India, they said.