Pepper heads north on buying support

The Pepper market continued to head north on buying support and bullish activities.

July contract moved up marginally, while August and September increased substantially.

The small and medium players who can't afford to pay the 3 per cent delivery margin were seen switching over or liquidating.

Those who got sales position were intending to deliver, market sources told Business Line . Those having long position were also switching over.

The market was highly volatile and the difference between July and August has widened significantly, they said.

July contract on the NCDEX moved up marginally by Rs 29 to close at Rs 28,097 a quintal. August and September increased by Rs 214 and Rs 205 respectively to close at Rs 28,793 and Rs 29,202 a quintal.

Total turnover

Total turnover increased by 5,622 tonnes to 12,221 tonnes. Total open interest moved up by 230 tonnes to 13,117 tonnes showing additional purchases.

July open interest fell by 864 tonnes to 3,793 tonnes, while August surged by 986 tonnes to 7,043 tonnes. September moved up by 74 tonnes to 1,412 tonnes.

Spot prices were up by Rs 100 to close at Rs 27,100 (ungarbled) and Rs 28,100 (Garbled) a quintal in tandem with the futures market trend and some buying support.

Expert processors bought high range pepper at Rs 275-279 a kg from the Rajakumari area of Idukki district. They might have sold futures also, they said.

Indian parity in the international market was at $6,650 a tonne (c&f) and remained very much in line with other origins which have also gone up on short supply. Some orders are expected. But the sudden spurt in the prices yesterday has made the buyers to wait for some time, watching on the hope the prices might fall also suddenly on the exchange.

Availability in Vietnam is reportedly limited contrary to the estimates made earlier. It has exported 68,619 tonnes in the first six of 2011. Besides, its exports to China was at 15,000 tonnes; loss ratio of white pepper processing was at 2,500 tonnes; domestic consumption at 3,500 tonnes and stocks held in factories were at 4,000 tonnes. Thus, out of the total 1.2 lakh tonnes, the balance available now for the next seven months is estimated at 26,381 tonnes. This report is appears to have pushed up the prices in all the origins, trade sources claimed.

Price indications on Friday were 500GL: at $5,600 a tonne (fob) HCMC; 550GL: $5,950 a tonne and V Asta 570GL: $6,350 a tonne and white pepper double washed was quoted at $8,250 - $8,300a tonne.

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