The Hindu Business Line : Tight supply position exists; asta grade pepper rules higher

Kochi May 13 Tight supply position, as it appears, continues to prevail in the world market and as a consequence the prices of Asta grade pepper in all the origins still ruled higher. Though Vietnam has reduced its prices for FAQ 500 GL to $3,550 a tonne (fob) it has been offering V Asta at $4,300 a tonne (fob). It is understood that Vietnam is not interested to sell this grade, as converting the bold blackberries into white would be more profitable given its prices now hitting the roof.

Profitable Proposition

Indonesia, where harvesting would take place some time late July/early August, was offering L Asta at $4,250-$4,300 a tonne (fob) while Brazil was offering Asta grade at $3,900-$3,950 a tonne (fob). Whereas, Indian parity was at $4,000-$4,100 a tonne (c&f). Thus, Indian pepper is placed at competitive price, market sources told Business Line.

Players in the international market are said to be using what they have in pipeline and adopted a strategy to wait so as to influence the market to reduce the price, which is unlikely to happen given the tight position, they said.

In India July/August/September are at high prices and hence buying spot and selling futures appears to be a profitable proposition. Even investors were ready to buy NCDEX delivered at Rs 5 above the spot price.

Selling Pressure

The prices in the futures market on Saturday moved up on reports tight supply position world over. May contract on NCDEX increased by Rs 111 a quintal to close at Rs 14,875 from Rs 14,764 on Friday. The rise in other contracts was from Rs 13 to Rs 152 a quintal.

On NMCE May contract moved up by Rs 131 a quintal to close at Rs 14,550 from Rs 14,419. The increase in other contracts was from Rs 113 to Rs 326 a quintal.

The total turnover on NCDEX declined by 7 tonnes to 20,347 tonnes while on NMCE it fell by 956 tonnes to 1,762 tonnes. The total open interest on NCDEX dropped by 322 tonnes to 29,296 tonnes. May position fell by 567 tonnes to 3,373 tonnes. June position moved up by 280 tonnes to 18,858 tonnes.

On NMCE the total open interest declined by 16 tonnes to 4,990 tonnes. May position was down by 23 tonnes to 1,837 tonnes while June moved up by 11 tonnes to 2,606 tonnes. There was no selling pressure seen. Spot prices moved up by Rs 200 a quintal to close at Rs 14,200 (un-garbled) and Rs 14,800 (MG 1) on Saturday.

IPC Report

According to International Pepper Community (IPC) report for the week on Saturday the black pepper market was calm and prices in Vietnam and India were relatively unchanged. In Lampung, average local price was around IDR 33,000 a kg, up by IDR 1,000 compared with previous week. In dollar term, the price increased by 6 per cent due to weakening of the dollar against IDR. In Sarawak, local price increased steadily from RM10.58 a kg to RM10.92 at the week's close. On an average, the price increased by 7 per cent locally and 6 per cent fob.

WHITE PEPPER

In Bangka, the price was stable at around IDR 39,000 a kg, but increased by 2 per cent in dollar term. In Sarawak, prices were up by 4 per cent locally and 6 per cent fob. In Hainan, prices increased by $130 per tonne to $5,078 for local purchases and $5,278 for fob at the week's close.

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