Astrology seems to have played a key role in the pepper market as bear operators based on astrological predictions were able to pull the market down significantly.

When expert analysts were forecasting that the market would shoot up to Rs 500 a kg level suddenly came the astrological prediction that the upward trend has ended on August 14 following a change in the star positions and prices would fall. Aided by the prediction the bear operators got into the driving seat and managed to bring the market down. All the active contracts on the exchange fell sharply.

Spot prices also decreased even though there was no selling pressure in the primary markets. The heavy downpour for the past three days in Kerala accompanied by winds and cloud bursts have totally stopped activities in the primary markets. Unfavourable weather conditions have made processing totally impossible, some of the primary market dealers in Idukki said. There were no sellers for high range pepper even at Rs 400 a kg.

As prices were ruling high, end-user industries were buying hand to mouth. Now, since prices were on a declining trend all the upcountry buyers, both industrial users and traders, are said to be keeping away from the market waiting for prices to fall.

There were certain selected overseas markets which prefer Malabar Garbled at a premium. Overseas markets seem to have given up the Indian pepper because of the wide gap between the Malabar and other origins, traders said.

Due to high prices, Indian exports of pepper have shown a decline. According to Spices Board sources, in April the shipments stood at 1,200 tonnes valued at Rs 44.74 crore at the unit value of Rs 372.80 a kg as against 2,266 tonnes valued at Rs 54.87 crore with the unit value of Rs 242.15 a kg. There has been a 47 per cent fall in quantity and 18 per crease in value. The unit value has gone up in subsequent months and remained more or less at Rs 400 a kg.

All the contracts on the NCDEX fell sharply despite rise in open interest. September, October and November contracts at the weekend decreased by Rs 1,510, Rs 1,385 and Rs 1,225 respectively to close at Rs 42,390, Rs 42,745 and Rs 43,135 a quintal.

Total turnover increased by 4,137 tonnes to close at 19,414 tonnes at the weekend. Total open interest showed an increase of 501 tonnes to end at 7,213 tonnes.

Spot prices in tandem with the futures market trend decreased by Rs 1,500 a quintal, despite no selling pressure, and closed at Rs 39,200 (ungarbled) and Rs 40,700 (MG 1) a quintal.

As spot prices were ruling below futures market prices, sellers could get away by paying 1.5 per cent margin.

Indian parity in the international market was at around $7,850 a tonne (c&f) Europe and $8,150 a tonne (c&f) USA.

(This article was published in the Business Line print edition dated August 20, 2012)
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