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G.K. Nair

Kochi , Feb. 3

PEPPER prices dropped sharply on panic selling in futures and huge imports from other origins.

The procurement operations by the Kerala Government since last month do not seem to have made any impact on the market so far.

Spot prices dropped by Rs 400 a quintal from that of Monday, while the futures have declined by Rs 541-577 a quintal in last four days. MG 1 was sold at Rs 6,400 a quintal on Thursday as against Rs 6,800 on Monday. Ungarbled, which was sold at Rs 5,300-6,300 a quintal, was sold at Rs 4,900-5,900 on Thursday.

On Thursday, futures prices were: February delivery Rs 6,186 as against Rs 6,741 on Monday, March Rs 6,281(Rs 6,844), April Rs 6,585 (Rs 7,131), May Rs 6,522 (Rs 7,063) and June Rs 6,956 (Rs 7,533) a quintal.

One of the reasons attributed to the sharp fall is liquidation by bulls because of very low margins. "Whatever position is liquidated and cut off in turn influenced the spot prices", Mr Kishor Shamji, President, India Pepper and Spice Trade Association (IPSTA), told Business Line.

Added to this, imports of pepper had gone up substantially, he said. In January, through Kochi port alone, 1,475 tonnes of pepper are reported to have been imported as against 659.36 tonnes in January 2004.

Also, pepper is imported through Chennai, Tuticorin and Mumbai ports as well as the internal container depots (ICDs) of Gwalior, Indore, Jaipur, Pune, Ghaziabad, Noida and Delhi, market sources here claimed. Imports are under advance licence by EOUs and the oleoresin industry.

According to them, the "pending licences should have been cancelled". Besides, they said, "night futures trading should be stopped".

They alleged that certain segments of the industry, which claim to import only pepper of 450 g/litre, are importing 550 g/litre at low prices and 50 per cent of this stuff is also pushed into the domestic market.

Besides, the white pepper imported from Indonesia at around Rs 90 a kg is also finding its way into the domestic market at Rs 115 a kg. The total imports through Kochi port in 2004 were 15,923.87 tonne (11,877.65 tonne).

The domestic buying, which is probably the only support base to keep the prices up, has been very weak.

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