Pepper prices on Thursday continued to be in the grip of long position holders who have been squeezing the market and rather compelling short position holders to buy back December contracts. Consequently, Dec contract went up significantly to close much above the previous day closing.

As the long position holders were hammering down the long positions February and March contracts continued to fall in recent days. Consequently, the difference between Dec and Feb prices widened by Rs 6,350 a quintal as of today. “Ulta badla” is also going on, but by short position holders who are forced to do it to get out of the market, market sources told Business Line.

Coupled with this phenomenon investors were buying back their sales in Dec contract and liquidating farm grade pepper with them in the market and that is being picked up by interstate dealers as most of the upcountry market pipelines are empty.

Domestic demand is expected to pick up in the coming days. End users demand is also going to pick up for the winter/wedding demand.

There have been no arrivals from the primary markets as Sabarimala pilgrims are said to be buying small quantities of pepper from Pathanamthitta, Kollam and Idukki districts. According to primary market dealers in Parakode (Pathanamthitta) and Punalur (Kollam), an estimated 5-7 tonnes of pepper are being traded daily and it is expected to increase as the number of pilgrim arrivals picked up.

Added to this, increased tourist arrivals to the State are also aiding retail black pepper business in the growing areas, they said.

Dec contract on the NCDEX increased by Rs 710 a quintal to Rs 39,920 . Feb and Mar contracts fell by Rs 590 and Rs 275 respectively to Rs 33,570 and Rs 33,425.

Total turn over declined by 22 tonnes to close at 3,914 tonnes. Total open interest decreased by 545 tonnes to 5,786 tonnes. Dec open interest fell by 598 tonnes to close at 3,012 tonnes while that of Feb and Mar increased by 3 (three) tonnes and 61 tonnes respectively to close at 2,215 tonnes and 500 tonnes.

Spot prices remained unchanged at Rs 37,300 (ungarbled) and Rs 38,800 (garbled) a quintal as there were no activities.

Indian parity in the international market was at $7,450 a tonne (c&f) Europe and $7,750 a tonne (c&f) for the US.

(This article was published on December 6, 2012)
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