The pepper market on Monday turned hot with all the active contracts increasing substantially on good buying support amid limited availability. Ungarbled touched unprecedented Rs 400 a kg level while the Malabar garbled hit Rs 415 a kg.

Quantity of pepper arriving at the terminal market was very thin. Availability of spot pepper is tight, market sources told Business Line.

They said taking cues from the market fundamentals the bull operators are pushing the market up.

In a rising market there will not be sellers. All the bearish efforts by operators turned out to be futile, the sources said.

Spot market

On the spot market, 14 tonnes arrived and 16 tonnes were traded at Rs 400, Rs 405 and Rs 415 depending upon quality, grade and area of production, they said.

July contract on the NCDEX increased by Rs 1,000 to the last traded price (LTP) of Rs 42,830 a quintal. August and September contracts went up by Rs 1,035 and Rs 1,105 respectively to the LTP of Rs 43,340 and Rs 43,790 a quintal.

Turnover

Total turnover increased by 2,900 tonnes, indicating good circular trading. Total open interest went up by 137 tonnes to 5,314 tonnes, showing added buying.

July open interest decreased by 241 tonnes showing liquidation/switching over to close at 1,384 tonnes while that of August and September increased by 315 tonnes and 37 tonnes respectively to close at 3,719 tonnes and 177 tonnes.

Spot prices shot up by Rs 700 in tandem with the futures market trend and limited availability to close at Rs 40,000 (ungarbled) and Rs 41,500 (MG 1) a quintal.

Indian parity in the international market has shot up to $7,900 a tonne (c&f) for the Europe and $8,300 a tonne (c&f) for the US.

Overseas trend

With the sharp rise in prices, Indian pepper completely isolated from the world scene, an overseas report said.

“Looks to be a very dangerous market, Cochin pepper exchange, in case you get caught... in a short position”, the report claimed.

Coming weeks will be summer holidays in Europe and market on buyers side will become easy/quiet, it said.

Pepper market remains in easy trend with Indonesia and Brazil offering their new crop at competitive levels.

(This article was published on July 9, 2012)
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