The pepper market remained in the second half of last week under the control of bear operators and hence market was by and large ruled by bearish sentiments leading to a decline in prices of all the active contracts.

Interestingly, the prices fell when there was a tight supply position prevailing and amid good domestic demand especially for spot pepper. Arrivals from the primary markets continued to remain thin because of cloudy weather in many of the growing areas in Kerala. Add to this, the rich growers who had liquidated their stocks when the prices were ruling above Rs 400 a kg were seen not interested to sell at the current prices and instead were holding back to replenish their stocks.

Inter-State dealers from Tamil Nadu were said to be aggressive in the primary markets and were covering good quantity of pepper from the growers and primary market dealers at terminal market prices for catering to the upcountry demand. “Whatever pepper arrives in the primary markets is swept away from these dealers,” trade sources said.

According to them, Wayanad-based dealers were also active in Idukki district these days buying directly from the growers/dealers. As the industry had imported light pepper at cheap rates from Indonesia and Vietnam there were no buyers for the light berries from the growers in southern districts of Pathanamthitta, Kollam and Thiruvananthapuram . This has resulted in them selling the low bulk density but bold looking pepper at Rs 350-355 a kg. Buyers from Jharkhand, Bihar and MP were covering it.

Output estimates

Some in the trade believe that the total Indian output would be around 55,000 tonnes this season. When the carry over stock of 10,000 tonnes are added the total availability in the country for 2013 might come to around 65,000 tonnes. The domestic market would absorb around 45,000 tonnes leaving a balance of 20,000 tonnes and of which an estimated 15,000 would be exported. The balance for carrying over would remain at around 5,000 tonnes, they claimed.

All the active contracts fell last week. Feb, Mar and Apr decreased by Rs 965, Rs 760 and Rs 755 respectively to close at Rs 34,010, Rs 33,775 and Rs 33,805 a quintal. Total turn over fell by 4,503 tonnes to close at 5,598 tonnes. Total open interest whereas increased by 522 tonnes last week to 3,525 tonnes.

Spot prices, in tandem with the futures market, also dropped by Rs 300 to close last week on Saturday at Rs 36,500 (ungarbled) and Rs 38,000 (MG 1) a quintal.

Indian parity in the international market at spot prices for Jan was at $7,200 a tonne (c&f) while at Feb prices it was at $6,500 . However, the exporters are said to be afraid to make any commitments as they said they don't know whether material would be available. No activities were there in the overseas markets because of Christmas season holidays and they are expected to resume late in the first week of Jan.

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