The Hindu Business Line : Pepper September contracts likely to gain

The outstanding position on NCDEX for August stood at 2,313 tonnes and the contract would mature on Monday. Hence, it is expected that 2,500 tonnes from both NCDEX and NMCE would be delivered. September and October positions would have around 20,000 tonnes of which 11,242 tonnes are of September. If 50 per cent of this is taken out the situation would improve, market sources said.

Since the stock validity would be up to October selling pressure in September is unlikely. On the other hand, the European markets would resume activities after the holidays, while there would be demand from the grinding industry next month. Given this scenario, a squeeze is expected in September pushing up the prices, market observers told Business Line.

Lower Indian parity coupled with weak rupee against dollar at the weekend has kept the Indian pepper competitive at $3,450 a tonne (c&f) even after the decline in other origins. Currently, all the other origins are above the Indian prices, they said. Therefore, demand is expected to come to India. Besides, a positive response is likely from the FMC on the quantitative restrictions for nearby position and if it came through it would have a positive impact on the market in the coming days. In the international market, though harvesting has started in Indonesia and Brazil, the availability in the world market is estimated to remain below the demand, they said.

FUTURES DECLINE

During the week all the contracts on NCDEX fell and the decline was from Rs 23 to Rs 252 a quintal. On NMCE, the drop was from Rs 158 to Rs 322 a quintal.

The total turnover on NCDEX fell by 35,582 tonnes to 1,09,696 tonnes, while on NMCE it dropped by 2,024 tonnes to 7,581 tonnes. The total open interest on NCDEX declined by 300 tonnes to 24,888 tonnes, while on NMCE it moved up by 107 tonnes to 2,004 tonnes. There was no selling pressure during the week and yet spot prices in tandem with the downward trend in the futures market dropped by Rs 200 a quintal to close at Rs 12,700 (un-garbled) and Rs 13,300 (MG 1).