The Indian pepper futures market continued to witness the tug of war between the bull and bear operators who are running it at their “whims and fancies” by pulling it down and pushing it up almost everyday. As a result, there remains an uncertainty about the price, which used to refrain exporters from making commitments while buyers overseas resort to wait and watch hoping the prices might drop or move up suddenly as it happens almost daily, market sources told Business Line.

In fact, Indian parity is somewhat in line with other origins which were reported firm due to limited availability of the material.

Indian parity in the international market was at around $6,600 a tonne (c&f) and remained very much in line with other origins which have also gone up on short supply. Reported crop failure in Sri Lanka has pushed up the prices of pepper there and especially for immature berries having high oil content to around $8,000 a tonne. This variety pepper could be grown in Kerala for the extraction industry if the government authorities and the industry initiated steps to promote its cultivation, they said.

Availability in Vietnam of black pepper is reportedly limited contrary to the expectations/ estimates made earlier. It has exported 68,619 tonnes in the first six of 2011. Besides, its exports to China was at 15,000 tonnes; loss ratio of white pepper processing was at 2,500 tonnes; domestic consumption at 3,500 tonnes and stocks held in factories were at 4,000 tonnes. Thus, out of the total 1.2 lakh tonnes the balance available now for the next seven months is estimated at 26,381 tonnes. This report is appears to have pushed up the prices in all the origins, trade sources claimed.

Price indications on Friday were 500GL : at $5,600 a tonne (fob) HCMC; 550GL : $5,950 a tonne and V Asta 570GL: $6,350 a tonne and white pepper double washed was quoted at $8,250 - $8,300a tonne.

Availability this year is estimated to be lower because of the decline in output in some of the growing countries, trade sources said.

After moving up sharply on Thursday hitting the second ceiling, the market dropped on Saturday. However, the increase has been so substantial on Friday that all the contracts showed a rise at the weekend. July, August and September contracts were up by Rs673, Rs929 and Rs992 respectively to close at Rs27,606, Rs28,385 and Rs28,814 a quintal. Buying interest shown by operators who had invested already an estimated Rs200 crore and bought around 4,300 tonnes of pepper was pointed out as the reason for the sharp rise in the prices on Friday. However, the bear operators managed to pull it down by spreading bearish sentiments, the next day.

Total open interest during the week declined by 76 tonnes to 13,215 tonnes. Total open interest moved up by 5,556 tonnes to close at 40,399 tonnes.

Spot prices increased by Rs600 a quintal to close at Rs26,900 (ungarbled) and Rs27,900 (MG 1) a quintal.

Availability of pepper is only on the exchange platform now and that is validity expired stocks. Primary market dealers and growers are reluctant to part with their produce at the current levels.

Expert processors were buying high range pepper from Idukki's Rajkumari areas at Rs 275 – Rs 279 a kg.

Those who cannot afford to pay three per cent delivery margin introduced on July which is maturing on July 20, were liquidating or switching over.

The domestic demand has been met almost fully by Karntaka which has been offering at lower cost delivered anywhere in India. However, as the prices have headed for north they are said to have slowed down their sales.

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