The Hindu Business Line : Pepper prices continue to fall

DOWNWARD trend continued in pepper prices during the week despite all the market intervention exercises in the recent months such as procurement by the Kerala Government and the Centre's ban on imports under advance licence.

While good quantity was being sold on the spot market, futures buying showed decline, according to market sources.

Compared to the previous Saturday, spot prices were down by Rs 200 a quintal on May 28. Prices of MG 1 and un-garbled on Saturday were Rs 6,300 and Rs 5,900 a quintal as against Rs 6,500 and Rs 6,100 a quintal respectively on May 21.

Futures prices on Saturday were Jun Rs 6,181 as against Rs 6,168 on May 21. July Rs 6,344 (Rs 6,003), , Sep Rs 6,661 (Rs 7,187), Oct Rs 6,853 (Rs 7,148) and Nov Rs 7,002 (Rs 7,413) a quintal. In fact, the futures prices quoted at the three exchanges, NMCE, IPSTA and NCDEX on Saturday has shown good difference for June and July.

Meanwhile much of the domestic demand is met by direct buying from Coorg region where the producers were selling at Rs 60 a kg. There was virtually no international demand as the importers are closely watching the market situation, anticipating that the prices might fall further.

Indian parity on Saturday was at $1,500-1,525 a tonne as against Indonesia's $1,425-1,475 and Brazil's $1,475-1,500 a tonne.

Given the thin difference between the Indian prices and that of other producers, some overseas demand is expected in Jun/Jul/Aug, they said. In fact, the higher prices quoted by Indonesia and Brazil could imply that there is a likely shortage in supply this year. According to the market sources the Indian production is estimated at 70,000 tonne in 2004-05-season and of which 4,800 tonne is held by the Kerala State procurement agency, Kerala State Cooperative Marketing Federation (Marketfed).

Meanwhile, there is said to be around 5,000 tonne lying in the warehouses of the future exchanges in the country. Besides, they claimed, the farmers used to hold around 10,000 tonne. Thus, out of the total indigenous production of 70,000 tonne, the quantity available for consumption would come to around 50,000 tonne as against the strong domestic demand of around 55,000 - 60,000 tonne.

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