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The pepper market witnessed continuous liquidation last week by the bull operators who have been holding huge stocks.
As the December contract is maturing on Dec 20 and the validity of the material is expiring on January 5, they were trying to liquidate the maximum because of the heavy financial loss involved, according to market sources.
There appeared to be no buyers probably because of the cost involved in re-processing. At the same time Jan is not listed on the exchange considering it as a lean month. The prices of nearby contracts moved up last week while the running contract Dec increased marginally.
Meanwhile, the domestic demand has started picking up and becoming strong day by day. The arrivals of new crop also started showing improvement of late.
On the spot, good demand was there from the upcountry markets. Some 15 tonnes of fresh pepper were traded to different directions on Friday at Rs 369-375 a kg depending upon the bulk density, moisture content, etc and area of production, they said.
Good buying interest was visible from Bihar, Uttar Pradesh, Delhi, Mumbai, Gujarat, Madhya Pradesh, etc as demand has picked up for the winter/festival/wedding season in the upcountry regions, market sources told Business Line . However, availability of the material continued to remain tight so far.
Dec, Feb and Mar contracts on the NCDEX increased by Rs 100, Rs 520 and Rs 625 a quintal respectively during the week to close at Rs 39,100, Rs 34,585 and Rs 34,410 on Saturday.
Total turn over decreased sharply by 8,647 tonnes to close at 8,004 tonnes last week. Total open interest dropped by 1,257 tonnes to 4,176 tonnes.
Spot prices remained unchanged at Rs 37,200 (ungarlbed) and Rs 38,700 (garbled) a quintal on limited activities.
Global front
Indian parity in the international market today was at $7,450 a tonne (c&f) for the Europe and $7,750 a tonne (c&f) for the US and remained out priced. Malabar Garbled is appears to have lost its buyers overseas as it remained not competitive in the international market with its high parity.
The buyers, even those have preference for the Malabar at a premium, seem to have shifted to other origins, mainly Lampong Asta grade pepper.
The difference between the prices of Malabar and other origins remained above $1,000 for much of the time.
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