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Pepper futures on Wednesday moved up on good buying support amid limited availability and despite liquidation from the previous close.
Even the bulls themselves said to have liquidated and yet the market closed higher.
It was explicit from the way 17 tonnes of new pepper arrived this morning were traded like hot cake, that the buyers were starving for the material. The arrivals of the new crop were not up to the mark and hence what ever came to the market was absorbed immediately, market sources told Business Line . It was traded at Rs 201 to Rs 205 a kg.
Small quantities of new pepper were being moved out directly from the primary markets also to Indore, Patna, Ranchi, Gaya etc. Because of the limited availability the buyers were aggressively covering, they said.
Arrivals continued to remain thin as the major growers who had sold old stock at Rs 215- 220 a kg earlier are said to be holding back for better prices. Besides, those having rubber are getting high prices and hence could easily afford to hold back their pepper, traders said.
Added to this, acute shortage of skilled labour for plucking the pepper has also become a factor to squeeze the supply, they said. The new crop harvesting in Karnataka is expected to commence from mid-Feb. The crop there is also said to be at previous year's levels, they said.
The cold wave conditions prevailing in the north Indian states have slowed down the domestic demand which was expected to pick up after the Makar Sankranthi.
Similar, weather conditions in the US and other overseas markets are also negatively affecting the buying activities. According to the latest reports, the US imports during Jan to Nov 2010 were lower by around 2,800 tonnes and hence some demand could come to India now as they have to cover for their immediate requirements, they said.
Spot prices moved up by Rs 200 on strong demand amid limited supply to close at Rs 21,600 (ungarbled) and Rs 22,400 (MG 1) a quintal.
Indian parity in the international market was at $5,175-5,200 a tonne (c&f) and remained competitive and hence some orders are expected from overseas from now onwards till mid-March, they said.
January contract on NCDEX increased by Rs 197 to close at Rs 22,638 a quintal. February and March went up by Rs 266 and Rs 282 respectively to close at Rs 23,146 and Rs 23,472 a quintal.
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