The Hindu Business Line : Pepper seen gaining on tight supply

Kochi June 24 The tight supply position prevailing in the world pepper market and consequent firm prices in almost all the other origins appears to have prompted overseas buyers, mainly from the US, to move towards Indian pepper which turned competitive last week.

High Volatility

In the Indian market, spot supplies have been very limited and hence, exporters have to depend on what is available with the exchanges, where the prices remained lower during the week. Investors who had kept away due to high volatility in the futures market in recent weeks have now started buying exchange delivered pepper.

Indonesia and Brazil have not shown any interest to sell their new crop anticipating that the prices might move up in the coming days. The output in these countries is reported to be less this year. Therefore, a tight supply position is likely to prevail in the world market. Given this scenario, it might turn out to be good for the investors to buy when the prices here are at lower levels, market sources told Business Line. The present market trend could pave the way for more business coming to India, they said.

RISE IN FUTURES

During the week pepper futures witnessed a sharp increase from Rs 1,113 to Rs 1,591 a quintal. July contract on NCDEX at the weekend closed at Rs 14,820 and on NMCE, at Rs14,630 a quintal. The total turnover on NCDEX increased by 17,310 tonnes to 1,38,843 tonnes, while on NMCE it went up by 3,788 tonnes to 12,754 tonnes.

Total open interest on NCDEX went up by 2,105 tonnes to 25,650 tonnes. July position dropped by 3,814 tonnes during the week to close at 6,336 tonnes. August went up by 6,264 tonnes to 13,658 tonnes.

On NMCE, the total open interest moved up by 470 tonnes to 2,775 tonnes. July position at weekend increased by 162 tonnes to 1,823 tonnes.

Spot Prices

Spot prices shot up by Rs 600 a quintal during the week in tandem with the futures market trend and tight supply position to close at Rs 13,800 (un-garbled) and Rs 14,400 (MG 1) on Saturday.

IPC REPORT

According to International Pepper Community (IPC) report for the week black pepper market throughout remained quiet with limited activity. In Vietnam the market was unchanged.

Prices of raw material at Daklak were stable during the week at VND 49,000 a kg, albeit dropped by VND 1,000 from last week. In Sarawak, local prices were also stable at around MYR 10,140 a tonne throughout the week, but slightly up by 2 per cent compared to last week. In Lampung, local prices were stable at around IDR30,000 a kg. In dollar terms, however, it was up due to stronger Indonesian currency.

WHITE PEPPER

In Bangka, local prices were also stable at around IDR 38,500 a kg. In Sarawak, white pepper prices improved marginally to MYR 14,540 a tonne. F.o.b price was stable at $5,200 per tonne. In Hainan, prices was up by 2 per cent from last week.

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