Pepper futures continued to remain volatile as a result of the tug of war between the bull and bear operators and last week, saw the bull operators supported by the market fundamentals getting into the driving seat and pushing the prices up.

Availability has been tight so far, as fresh pepper arrivals failed to pick up as anticipated. Cloudy weather conditions are said to be hampering the harvesting in Kerala.

Add to this, interstate dealers from Tamil Nadu were active in the primary markets and were covering whatever available at terminal market prices.

Good demand was there for high bulk density pepper from Mumbai, Delhi, etc. and investors were selling 7-8 years old pepper at Rs 385 a kg.

Dealers from Cumbum, Theni, Erode in Tamil Nadu and from Kumily in Kerala were buying good quantity. Meanwhile, non-availability in Wayanad has forced dealers to come to Idukki to buy pepper, market sources told Business Line .

Low bulk density pepper but looking bold with high moisture content was bought by Jharkhand, Bihar and Madhya Pradesh dealers. The Sabarimala pilgrims were also buying pepper. Consequently, the arrivals at the terminal market continued to remain very thin.

On the exchange platform also availability is likely to be very thin. The current supply squeeze seems to be a temporary phenomenon given reports of a good crop, they said. Once the cloudy weather conditions disappeared, arrivals are expected to pick up.

About 75 per cent of pepper growers in Kerala are of small and medium category. Hence, there would be a selling pressure pushing the arrival up in the coming days. Meanwhile, the pipelines/inventories in the upcountry markets are said to be empty and, hence, the domestic demand is expected to remain strong absorbing much of the output and that in turn would keep the domestic prices almost steady at current levels. However, availability in the international market may marginally outstrip the demand and, hence, slight fluctuations with an easier slant could be expected, they said.

All the active contracts moved up last week following bullish activities. Feb, Mar and Apr contracts increased by Rs 1,365, Rs 525 and Rs 65 respectively last week to close at Rs 35,375, Rs 34,300 and Rs 33,930 a quintal respectively.

Total turnover stood at 8,029 tonnes up by 2,431 tonnes. Total open interest moved up by 105 tonnes to close at 3,630 tonnes.

Spot prices last week surged by Rs 900 to close at Rs 37,400 (ungarbled) and Rs 38,900 (MG 1) a quintal in tandem with the futures market trend and limited supply of physical pepper.

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