The downtrend in the pepper futures last week brought the Indian parity to competitive levels, paving the way for orders likely to come to India.

But it will turn out to be a reality only when the Indian prices ruled steady at competitive levels, trade sources said. Since the market remains by and large in the hands of operators, more often than not, uncertainty prevails in the market consequent to the “push and pull”. The currency fluctuation is also a dissuading factor, they said.

But contrary to expectations that in line with the trend here, there would be a corresponding decline in prices in other origins, the markets overseas remained firm and that gives the impression that there is virtually a mismatch in demand and supply, the former outweighing the latter, prevailing in the market world over.

The next crop in Indonesia, said to be around the corner, is reportedly less and the prevailing situation drives one to the conjecture that the overall world output does not appear to be rising corresponding to the growth in demand. Consequently, there exists disequilibrium in demand and supply and that is likely to persist for some time given the unfavourable climatic conditions in growing countries, of late.

Availability in India, at present, is only on the exchange platform and that is of validity expired stocks and some farm grade pepper, market sources claimed.

Growers and primary market dealers are not said to be ready to part with their stocks at current levels. Thus, there seems to be a supply squeeze here. Karnataka growers and dealers have slowed down their aggressive selling following sharp fall in the prices, they told Business Line .

All the contracts on the NCDEX last week declined. July, August and September contracts dropped by Rs 129, Rs 127 and Rs 136 respectively to close at Rs 27,297, Rs 27,616 and Rs 27,904 a quintal.

Total turnover fell by 30,147 tonnes during the week to close at 47,703 tonnes on Saturday. Total open interest increased by 1,692 tonnes to 12,452 tonnes at the weekend close.

Spot prices moved up marginally by Rs 100 to close at Rs 26,300 (ungarbled) and Rs 27,300 (MG 1) a quintal.

Indian parity in the international market was competitive at $6,400 — $6,450 a tonne (c&f) and it would have been even cheaper but for the strong rupee against the dollar, they said.

Overseas trend

The black pepper market, according to the International Pepper Community (IPC) was volatile in India last week probably due to speculation rather than market forces.

Fob prices were reportedly stable at most origins with the exception of India. Other than Malabar Garbeled 1, c&f price of all origins also increased in the US.

At Kochi, local price dropped from Rs 27,500 per 100 kg last week to Rs 26,200 on Monday and Rs 26,100 on Tuesday. On Wednesday, the price moved up to Rs 26,300. On an average pepper prices in India decreased by 5 per cent.

In Lampung, there was a marginal fall in local prices.

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