Pepper futures fall on liquidation

Pepper futures on Monday fell on heavy liquidation and switching over. The market opened on a strong note and then started sliding and thereafter in the afternoon it witnessed some volatility and dropped sharply at the closing minutes.

The tug of war between the bulls and bears has been pointed out as the reason for such a scenario and in the process small and medium players have been wiped out. “Violent fluctuations are not in the interest of the market and it gives the impression that there are no regulators to arrest it, as it is functioning like a gamblers' den,” market observers alleged.

Bulls have been successfully holding February delivery above the March, they told

Business Line . Some spot buying was there in the morning at Rs 230 to Rs 237 a kg. But, as the market started declining both buyers and sellers withdrew. Some sellers were ready to offer at Rs 228 a kg, good pepper, they said. February contract on NCDEX fell by Rs 337 to close at Rs 25,029 a quintal. March and April contracts dropped by Rs 956 and Rs 981 respectively to close at Rs 24,097 and Rs 24,135 a quintal.

Total turnover dropped by 1,053 tonnes to 22,185 tonnes. Total open interest fell by 915 tonnes to 17,566 tonnes. February open interest fell by 876 tonnes to 7,210 tonnes showing heavy liquidation. Similarly, March dropped by 410 tonnes indicating liquidation/switching over.

April open interest increased by 264 tonnes showing switching over to 1,515 tonnes.

Spot prices in tandem with the futures market trend fell by Rs 400 to close at Rs 22,800 (ungarbled) and Rs 23,600 (MG 1) a quintal. Indian parity in the international market was at $5,575 - $5,600 a tonne (c&f) and remained out priced.