Pepper futures slide on liquidation

Pepper futures on Wednesday fell sharply on heavy liquidation coupled with news of import of pepper from Vietnam and supported by bearish activities.

There was switching over and liquidation from February to nearby positions.

There were reports of 500 tonnes of 550 GL pepper have been bought by Indian importers at $4,800 a tonne (c&f) Kochi, which would be arriving here soon and it will work out to below Rs 22,200 a quintal.

The importers are allegedly bringing the material duty free on “dummy contracts” and may not be re-exporting under this contract, growers claimed.

Therefore, the growers urged the Government to look into this aspect.

They said importers should have a confirmed re-export contract against which only they should be allowed to import and it has to be strictly monitored to ensure that the contract submitted for obtaining import licence has been utilised properly in its letter and spirit, market sources told Business Line.

“They have got a long rope of 120 days for value addition and re-export and all out efforts are allegedly being made to get this period extended further”, they said.

“Such loopholes needed to be plugged,” they demanded.

Some of these importers, they alleged, said to have sold March delivery on the exchange platform at Rs 250 a kg.

The bear operators have asked domestic buyers to stay away from the market saying prices would collapse in the coming days as more Vietnam pepper would enter the market, they said.

Jan shipments

Meanwhile, January shipments have not been moved out of the Kochi port because of the uncertainty existing over a settlement with the striking workers.

February contract on NCDEX fell by Rs 1,015 a quintal to close at Rs 24,375. March and April dropped by Rs 779 and Rs 741, respectively, to close at Rs 23,499 and Rs 23,570 a quintal.

Total turnover

Total turnover moved up by 986 tonnes to 14,732 tonnes. Total open interest fell by 273 tonnes to close at 16,809 tonnes.

February open interest dropped by 1,214 tonnes to 5,672 tonnes while that of March and April moved up by 694 tonnes and 210 tonnes, respectively, to close at 8,877 tonnes and 1,828 tonnes.

Spot prices fell in tandem with the futures market trend and some selling pressure to close at Rs 22,200 (ungarbled) and Rs 23,000 (MG 1) a quintal.

In the international market, the Indian parity dropped to $5,425-5,450 a tonne (c&f) and there exists a fluid scenario. “Everybody is confused. Uncertainty prevailed,” they said.