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Pepper market appeared to be confusing during the week. Surprisingly, despite switching over to next delivery and buyers having decided to go for delivery, the market fell sharply during the week. At the same time, Indian parity remained in line with Indonesia and Vietnam at $5,400 a tonne (C&F), Europe and $5,500 a tonne for USA. And yet, the market showed a bearish sentiment here.
Buyers are confused and in a dilemma as many find it difficult to make out to which direction the market is moving, High price for white pepper is likely to compel Vietnam to convert its bold black pepper into white at comparatively much lower cost.
Vietnam double washed white pepper is being sold at $7,400 a tonne, while Muntok white pepper has been quoted at $8,000 a tonne, thus availability of Asta grade pepper in the world market is expected to remain squeezed, keeping prices firm in the coming days.
However lower grade black pepper from Vietnam at low prices might influence importers to buy it. If it finds its way into the Indian domestic market that may result in depressing domestic prises further, market sources told Business Line . In India, availability of black pepper continued to remain squeezed probably because of the poor crop.
Direct buying by the up country dealers from the primary markets has also shrunk the arrivals at the terminal market. During the week, expert processors were buying from the primary market dealers farm grade pepper and processing it into MG1 and depositing in selected warehouses.
A total of 2,537 tonnes of black pepper matured into delivery. Of this 2,529 tonnes are on the exchange platform, while 8 tonnes are between customers and brokers.
During the week all the contracts fell sharply, March, April and May fell by Rs 1,518, Rs 1,381 and Rs 1,439 respectively to close at Rs 23,535, Rs 23,735 and Rs 24,046 a quintal. Total turnover dropped by 34,483 tonnes to close at 85,173 tonnes on Saturday.
Total open interest fell by 4,086 tonnes to close at 14,395 tonnes. Spot prices fell by Rs 800 during the week to close at Rs 22,400 (ungarbled) and Rs.23,200 (MG1) a quintal. The spot market also declined during the week in tandem with the futures market trend despite good covering by upcountry directly from the primary markets evading taxes.
An overseas report from the US today quoted prices for black pepper of different origins in dollar/tonne c&f New York were MG 1 Asta - 5,450-5,550; Lampong asta – 5,475-5,575; Brazil B2 500G/L – 4,800 FOB; Brazil B1 550G/L – 4,900 FOB; Brazil B asta – 5,000-5,100 FOB (reportedly 4,850-4,900 fob recently traded); Vietnam 500G/L – 4,650 FOB; Vietnam asta – 5,300-5,350; MLV Asta – 5,450 EX warehouse New York / New Jersey.
White pepper prices quoted per tonne in dollar c&f were Muntok – 8,250-8,300; Vietnam (double washed)-7,400 and Chinese-7,400-7,450.
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