The Hindu Business Line : Pepper prices rule steady

THE pepper prices were steady with marginal fluctuations last week. Arrivals continued to remain thin from the growing areas. The processors are said to be buying from the primary market and selling directly to the investors.

As a result, the warehouses of all the exchanges are getting filled up. Stock held in warehouses is estimated at around 11,000 tonnes at present. NCDEX warehouses are holding 6,625 tonnes while the NMCE 3,214 tonnes and the balance is held by other exchanges such as IPSTA.

Meanwhile, as the February contract is reaching maturity, selling is taking place. Since this stock is nine-month old it is being, allegedly, sold at discounted prices and that is said to be giving wrong signals about the actual market.

For instance, when spot price is ruling at Rs 6,950 a quintal on Saturday (February 18) February delivery was sold at Rs 6,858 a quintal by NCDEX.

The international market is ruling steady but waiting for the Vietnam crop to hit the market by mid-March. Vietnamese pepper is expected to enter the market after the Chinese buying is over.

Brazil and Indonesia are reported to have exhausted their stock. Brazil was offering at $1,650, Indonesia at $1,650-1,675 a tonne C&F. Indian parity is at $1,700 a tonne, which is an acceptable price, according to trading sources. Vietnam is offering ASTA grade cleaned 560 - 570 GL at $1,575 a tonne C&F.

Currently, enquiries are floating for Indian pepper and there is a chance for India provided the prices remained at the current levels, they said.

Given this scenario, they said, if the export subsidy is extended till Jun 2006, the exporters would be able to book forward contracts.

There is good domestic demand but it is met by sales directly from the primary market.

The spot prices on February 18 at the terminal market here remained at the previous Saturday's levels of Rs 6,950 for MG1 and Rs 6,550 a quintal for Un-garbled.

VKUY benefits to pepper: The DGFT through a policy circular No 50 (RE-2005)/2004-2009 dated February 15 has extended the benefits under Vishesh Krishi Upaj Yojana (VKUY) to pepper exports."