The pepper market continued to head north on Thursday on circular trading amid limited availability. The active contracts ended much above the previous closing.
The market witnessed high volatility as usual, as a result of the tug of war between the operators. Trading was concentrated on February with 89 per cent of the total turnover in that delivery. But the open interest was only one tonne and that clearly indicated good circular trading. The open interest showed some increase only in April delivery, market sources told Business Line.
Bull operators appear to have resorted to circular trading to push up prices supported by the current market fundamentals, they alleged.
There was good domestic demand as the pipelines in the upcountry markets are empty. Pongal demand from Tamil Nadu was also visible. End users were also said to be in need of the material. But, availability continued to remain thin.
On the spot, only eight tonnes of fresh pepper arrived and of this seven tonnes were traded at Rs 350-375 a kg, depending on the bulk density, moisture content, quality and area of production, they said.
There is said to be no stocks at the exchange platform. Validity of 609 tonnes available in December will expire on January 5 while the balance of December has been rematted as the financiers will not finance the material which is not valid, traders said. January is not listed on the exchange citing the month as lean, they said.
Total turnover went up by 44 tonnes to close at 1,643 tonnes. Total open interest increased by 43 tonnes to 3,721 tonnes.
February, March and April open interest rose by one tonne, three tonnes and 38 tonnes respectively to close at 2,807 tonnes, 695 tonnes and 197 tonnes.
Spot prices in tandem with the futures market trend and tight supply scenario increased by Rs 300 a quintal to close at Rs 37,100 (ungarbled) and Rs 38,600 (MG 1) a quintal.
Indian parity in the international market at spot prices stood at $7,350 a tonne (c&f) while at Feb prices it was at $6,700 a tonne (c&f). Strengthening of the rupee against the dollar also aided the rise in the parity, they said.