Pepper futures witnessed the usual tug of war between both the operators and the market went down further last week.

The prices dropped despite non-availability of physical pepper on the ready market. There were no arrivals from the primary markets. The harvesting of the new crop has not yet started and the arrival of the fresh pepper is expected only from mid-Dec.

Consequently, no physical pepper was available on the spot either in Kerala or Karnataka. domestic demand started picking up from Monday onwards after the holidays as the pipelines of the stockists are said to be empty following liquidation by many of them in recent weeks.

Absence of supplies from the growers said to have prompted primary market dealers to buy Dec by Rs 7-8 below the delivery price. Upcountry dealers were also showing interest to buy from hedgers.

The total turn over in Dec was at 14,796 tonnes while the open interest in Dec delivery increased by only 54 tonnes. All the active contracts during week decreased. Dec, Feb and Mar fell by Rs 385, Rs 530 and Rs 740 respectively a quintal to close at Rs 38,360, Rs 35,110 and Rs 34,465.

Total turn over increased by 18,372 tonnes to close at 31,475 tonnes. Total open interest decreased by 433 tonnes to close at 7,935 tonnes.

Spot prices in tandem with the futures market trend dropped by Rs 400 during the week to close at Rs 37,600 (ungarbled) and Rs 39,100 (MG 1) a quintal despite a squeeze in supply.

(This article was published on November 25, 2012)
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