Kochi, Oct. 11
Despite good business taking place with the US on Monday/Tuesday, the futures market crashed on Wednesday and fell far below the spot prices.
"Without any rime or reason the prices fell sharply through alleged manipulation and the market has become a gambling house," market sources told
October contract fell by Rs 352 on NCDEX to close at Rs 11,721 on Wednesday from Rs 12,073 on Tuesday. On NMCE, it fell by Rs 405 a quintal to Rs 11,400 from Rs 11,805 on Tuesday.
The drop in other positions on NCDEX was from Rs 455 to Rs 600 a quintal, while on NMCE it was from Rs 510 to Rs 575 a quintal.
The total turnover on NCDEX went up by 2,608 tonnes to 30,254 tonnes. On NMCE, it dropped by 106 tonnes to close at 5,568 tonnes from 5,674 tonnes.
The total open interest on NCDEX was at 26,859 tonnes compared with 26,071 tonnes on Tuesday, while on NMCE it was at 5,573 tonnes as against 5,823 tonnes.
The outstanding position for October, November and Decmber on NCDEX was 3,629 tonnes, 12,750 tonnes and 7,166 tonnes respectively. On NMCE, the December position was at 3,933 tonnes.
Meanwhile, rumours were spreading from Delhi that Indonesia and others had reduced their prices and that had also contributed to the fall, they said.
Spot seller reluctant
According to international players, in the US L Asta was being quoted at $3,200 a tonne (c&f), while Brazil Asta at $2,850 (f.o.b). Resellers were offering at $3,225 a tonne. But MSLV Jan/Feb/Mar 2007 was being offered at $3,550 a tonne. Big grinders used to cover their requirement for first quarter of 2007 now.
As the futures prices have dropped exporters might get orders. However, it might become difficult for them to cover, as the spot sellers did not want to sell at this price. On other hand, October delivery is available cheaply now. The quality might turn out to be a problem when the buyers take delivery of the commodity after October 15, they said. Alleged manipulation of the market needs to be corrected by the Regulators, they said.
Spot prices dropped marginally by Rs 100 a quintal to close at Rs 11,500 (un-garbled) and Rs 11,900 (MG 1).