Pepper futures market bounced back on Thursday on bullish overseas reports projecting a supply squeeze in all the origins this year. All contracts increased substantially in a volatile market. Some long-position holders switched over to April, as the difference between March and April deliveries widened. As a result, investors who were selling at Rs 6 below March's price reduced their discount to Rs 5 a kg. There was no selling pressure from the investors.

According to market observers, some people are trying to push up the market so that they could sell their stocks on the domestic market. On the other hand, some are trying to create a feeling of scarcity in order to facilitate imports into the domestic market. That might keep the growers who are holding stocks away from the market.

International buyers ran around to cover as end-users bought hand-to-mouth. Therefore, demand for Malabar is likely. Stocks are limited. Moreover, Karnataka pepper arrivals are expected soon.

March contract on the National Commodity and Derivatives Exchange increased by 368 tonnes to close at Rs 22,768 a quintal. April and May went up by Rs 339 and Rs 368 to close at Rs 23,079 and Rs 23,340 a quintal. Turnover dropped by 1,739 tonnes to close at 10,341 tonnes. Open interest moved up by 312 tonnes to close at 13,298 tonnes, indicating good additional purchases. March open interest dropped by 396 tonnes, while that of April increased by 692 tonnes indicating good switching over and additional buying. May moved up by 19 tonnes to 522 tonnes. Spot prices, in tandem with the futures-market trend and buying interest, moved up by Rs 200 to close at Rs 22,100 (ungarbled) and Rs 22,900 (MG1) a quintal. In the international market, Indian parity was at $5,250-5,275 a tonne (c & f), in line with other origins. Some demand is therefore expected in the coming days.

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