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Pepper futures continued their southward move on bearish activities despite no change in the fundamentals.
It is totally in grip of bear operators who are pressurising those who took delivery of 2,500 tonnes from the exchange earlier to liquidate, market sources told Business Line .
March contract on the NCDEX dropped by Rs 244 to close at Rs 21,906 a quintal. April and May were down by Rs 212 and Rs 150 respectively to close at Rs 22,381 and Rs 22,688 a quintal.
Total turnover dropped by 233 tonnes to 7,275 tonnes. Total open interest fell by 195 tonnes indicating liquidation.
March open interest fell by 577 tonnes to 4,309 tonnes while April and May moved up by 357 tonnes and 13 tonnes respectively to close at 8,260 tonnes and 787 tonnes showing switching over and liquidation, they said.
The additional margin of 6 per cent today on both buyers and sellers over and above the 10 per cent mark compelled some traders to liquidate. The days left for the March cutting is also limited, three days. Therefore, small and medium operators who cannot afford to hold and pay the additional margin would either liquidate or switch over, they said. This scenario has been projected to pull the market down through panicky sale. But, spot sellers stayed away saying they do not want to sell at the current levels.
At the same time, availability of spot farm-grade pepper is very thin as sellers are not forthcoming. In fact, spot price is above the March delivery price and yet they alleged that there were no takers for exchange delivered pepper.
However, some of the exporters having pending commitments were opting to take delivery, they said.
Indian parity in the international market has come down to $5,050 a tonne (c&f) and there were buyers at this rate as the MG 1 is competitive in the market, they said.
Domestic buyers are keeping away from the declining market. Anyway, farm-grade pepper was not available in the market, they said.
As the Indian parity remained very much in line with other origins, there is every likelihood that some orders would come at the current rates. However, if the market moved up tomorrow then the situation might change, they added.
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