Pepper market, of late, has been allegedly functioning without out adhering to the market fundamentals and as such there is an uncertainty resulting in many loosing confidence in the market.

There has been no selling pressure either from the farmers or from the dealers. Only investors were liquidating and getting out of the market. And yet, the market has been dropping.

Even though the Indian parity has become competitive today at $6,450-6,500 a tonne (c&f) nobody has the courage to make any commitments because of the high fluctuations in the prices without any reason. “Nobody knows to which direction the market would head on Monday”, they said.

Investors having validity expired stocks were ready to sell at Rs 10 below the July price and some exporters and processors said to have bought some.

Lack of processing facilities in this unfavourable weather conditions and non-availability of space in the warehouses are also creating problems. In the new warehouses in the neighbouring Alapuzha district other imported spices have been given space, they alleged.

The market has been in the bearish hands at the closing days of the week when the prices hit the lowest levels consecutively for two days. Consequently all the contracts fell sharply during the week. July, August and September fell by Rs 1,725, Rs 1,353 and Rs 1,001 respectively to close at Rs 27,426, Rs 27,743 and Rs 28,040 a quintal.

Turnover gains

Total turn over increased by 43,834 tonnes to 77,850 tonnes. Total open interest increased by 2,447 tonnes to close at 10,760 tonnes indicating heavy additional purchases and yet the market fell sharply during the week. It is a clear indication that the market is not running on market fundamentals.

Spot prices fell by Rs 1,100 a quintal during the week, without any selling pressure and just in tandem with the futures market trend to close at the weekend at Rs 26,200 (ungarbled) and Rs 27,000 (MG 1) a quintal.

Demand is likely to emanate from the domestic market. But, the trend is that nobody would buy from the declining market. Similarly, as the Indian parity has become competitive there are chances for overseas demand to come. But there the market is hovered by uncertainty due to high fluctuation in prices, created mainly by market manipulators.

In fact, the market in other origins were reportedly firm and there hasn't been any reported improvement in availability so far, so as to pull down the prices in the international market, they claimed.

Overseas trend

In Vietnam, local price increased marginally by 1 per cent, but fob price was stable. In May Vietnam exported around 15,000 tonnes of pepper valued at $82 million.

Total export of Vietnam in the first five months would be around 56,000 tonnes worth $293 million, recording 60 per cent increase in value over the last corresponding period.

In Sarawak, prices dropped marginally both in local and f.o.b., possibly due to adequate quantity from the current crop.

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