The pepper market on Friday bounced back after the usual tug-of-war between bull and bear operators. All the active contracts ended much above the previous closing.

Following spreading of bearish propaganda in the morning that the market would collapse, August contract which opened at Rs 43,555 a quintal dropped to Rs 43,500 and thereafter traded with high volatility.

At the end of noon session, it increased by Rs 620 a quintal to Rs 44,170 and then declined in the closing session and ended much above the previous day closing.

Stock position

The stock position at the exchange was said to be around 2,200 tonnes and another 300 tonnes is likely to be added making the total to 2,500 tonnes.

Already 1,000 tonnes of June and 500 tonnes of July are with the “bull cartel” and the balance 1,000 tonne is also likely to be cornered by it squeezing the market, market sources told Business Line.

August contract on the NCDEX increased by Rs 505 a quintal to the last traded price (LTP) of Rs 44,050 a quintal. September and October were up by Rs 660 and Rs 650 respectively to the LTP of Rs 44,250 and Rs 44,600 a quintal.

Turnover

Total turnover increased by 1,093 tonnes to 4,166 tonnes. Total open interest went up by 136 tonnes showing additional buying.

August open interest decreased by 341 tonnes to 3,328 tonnes while September increased 4,87 tonnes to 3,803 tonnes showing liquidation and switching over/additional buying. October open interest declined by 9 tonnes to 558 tonnes.

Spot prices in tandem with the futures market trend and buying interest increased by Rs400 to close at Rs40,900 (ungarbled) and Rs42,400 (garbled) a quintal.

Indian parity in the international market was at $8,150 a tonne (c&f) and $8,450 a tonne (c&f) the USA.

Buying interest was there. Speculative position holders were liquidating Aug and buying Sep. Arrivals on the spot was only 9 tonnes of farm grade pepper which were traded at Rs409, Rs413 and Rs415 a kg depending upon the quality, grade and area of production.

Overseas trend

Demand for light berries from overseas buyers, mainly India, its prices in Vietnam remained by and large steady to firm.

However, white pepper prices were easier, an overseas report today said. Some of the Indian companies were reportedly buying light and semi light pepper at a premium from Vietnam, Sri Lanka and Indonesia.

(This article was published in the Business Line print edition dated August 4, 2012)
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