The Hindu Business Line : Pepper futures shoot up on good domestic demand

Kochi, Dec. 23 The pepper futures market during the week witnessed significant increase on good domestic demand and tight supply position and as a result the Indian parity has become totally out priced.

Indian price at the weekend close moved up to $3,750 a tonne (c&f) when the other origins, Indonesia and Brazil, who are in the market, at present, were offering at $3,400 a tonne (c&f).

Poor arrivals

On the other hand, the new crop in India has not yet started arriving even as “we are entering into the last week of December,” market sources told Business Line. Even those in the primary markets were also reporting of poor arrivals. Now, indications are that the new pepper may arrive by mid-January.

Primary markets

It appears that the futures market has moved out of the discounting mode and corrected itself, they said. Upcountry dealers in Delhi, Punjab, Gujarat and Maharashtra were actively buying from the primary markets.

Indian output is said to be below 50,000 tonnes this season and the country’s internal demand is estimated to be somewhere around this level leaving not much exportable surplus.

Vietnam pepper

Given this scenario, until April/May 2008 and also depending upon the arrival of Vietnam pepper, the prices are unlikely to witness any sharp decline.

The prices on NCDEX at weekend close showed an increase from Rs 541 to Rs 825 a quintal while on NMCE it was from Rs 500 to Rs 595 a quintal.

The total turnover during the week on NCDEX moved up by 309 tonnes to 65,601 tonnes while on NMCE it dropped by 1,048 tonnes to 5,434 tonnes. Total open interest at Saturday’s close on NCDEX showed a decline of 550 tonnes to 18,370 tonnes while on NMCE it dipped by 15 tonnes to 1,426 tonnes.

On NCDEX, December and January positions fell by 1,810 tonnes and 3,700 tonnes respectively during the week while that of February increased by 4,232 tonnes. The spot prices also moved up by Rs 200 a quintal in tandem with the futures market trend and good domestic demand during the week to close at Rs 12,800 (un-garbled) and Rs 13,400 (MG 1).

IPC Report

According to the International Pepper Community (IPC) report for the week the black pepper market continued to remain quiet during the week.

Prices eased at most origins.

However, in the Indian exchanges the prices moved up significantly on Friday and Saturday.

At other sources the markets were very calm and prices eased by around 4-5 per cent compared to that of last week.

WHITE PEPPER

Like black pepper, market for white pepper was also quiet. Prices in Bangka and Sarawak have eased marginally by one per cent, while in Hainan the price was up by one per cent.

Rise in exports

During October 2007, India exported around 3,250 tonnes of pepper worth Rs 45.5 crore against 2,425 tonnes valued at Rs 29.83 crore in October 2006.

During January-October 2007, total export from India was 27,026 tonnes valued at Rs 366 crore, increasing substantially by 46 per cent in volume from 18,573 tonnes in the same period last year.