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Pepper futures on Tuesday dropped on bearish sentiments created by reports such as Vietnamese offer of pepper at lower rates, failure of talks to end the strike at Kochi port, limited time left between now and maturity of February contract, and so on.
The market opened on a steady note and continued so till noon. Since the ‘badla' has shrunk, those holding validity-expired stocks and farm-grade pepper against their sales were liquidating. Investors were buying back their sales.
Non-availability of physical pepper has compelled even leading exporters to buy the validity-expired pepper.
Stuck at the port
Following continuance of strike at the port, pepper cargoes sent for shipment in the last week of January are held up in the port. Even consignments moved to Tuticorin port were also allegedly stopped by the strikers en route. As a result, whatever pepper consignments which “we were able to sell during the gap between January 15 and February 15, that is, before the Vietnam crop hit the market, are stuck here without leaving the Indian shores,” some of the exporters told Business Line .
Vietnam reportedly was offering 500 GL and 550 GL pepper at $4,450 (c&f) and $4,650 (fob) a tonne respectively . Some of the multinational companies and exporters with multi-origin operations were also allegedly offering Vietnam pepper cheap, they said.
Now, the arrivals will pick up and the trade has to depend on the domestic market for business, they said.
February contract on the NCDEX dropped by Rs 169 and closed at Rs 23,160 a quintal. March and April dropped by Rs187 and Rs 192 respectively to Rs 23,402 and Rs 23,690 a quintal.
Total turnover fell by 8,327 tonnes to close at 14,922 tonnes. Total open interest increased by 494 tonnes to close at 15,767 tonnes showing good buying interest.
Spot prices, in tandem with the futures market trend, dropped by Rs 100 to close at Rs 21,900 (un-garbled) and Rs 22,700 (MG 1) a quintal.
Indian parity in the international market remained out priced at $5,300-5,325 a tonne (c&f), despite the decline in the futures market prices, due to appreciation of the rupee against the dollar, they said.
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