Commodities

Pepper market sluggish as prices rule firm

G. K. Nair Kochi | Updated on September 11, 2011




Pepper market world over witnessed sluggishness due to high prices prevailing in all the origins even though there were claims of

availability of black pepper cheap in one origin or the other.

But, according to the market sources, the material offered at low price is of lower grade and the price of that grade is quoted even at $7,000 a tonne. For instance, 500 GL black pepper is offered by Vietnam at $7,000 a tonne (fob). Brazil is reportedly offered Asta grade at $7,300 a tonne (fob).

In India also, farm grade pepper may be available at these rates or even lower but that may be of low bulk density with high moisture content, market sources told Business Line. Processing cost, as it has to be done mechanically, is estimated at Rs 15 a kg and, therefore, the price will go up for processed material, they said.

The demand for Malabar in the overseas market is because of its high bulk density. The US buyers demand that the Asta grade pepper should be of 570 GL, while the Europe requirement is for 560 GL.

The quality of the material and its parameters differ with area and thus the prices also vary in India and other growing countries, they said. Prices in other origins, especially Indonesia and Vietnam, were firmer and the latter wasn't offering anything other than 500 GL black pepper, while Lampong was said to be reluctant to sell at lower rates.

The futures and the spot market has been fluctuating last week. Even in Karnataka the prices quoted last week were Rs 305 and Rs295 a kg delivered anywhere in India but these prices are for lower grades, market sources said. The currency factor has kept the Indian parity lower at $7,500 a tonne (c&f) for Europe and $7,700 a tonne (c&f) for the US.

September, October and November contracts on the NCDEX dropped by Rs 246, Rs 341 and Rs 142 respectively during the week to close at Rs 33,088, Rs 33,693 and Rs 34,142 a quintal.

Total turnover fell by 3,035 tonnes to 24,910 tonnes indicating limited activities last week. Total open interest also dropped by 218 tonnes. Spot prices moved up by Rs 200 during last week to close on Saturday at Rs 30,200 (ungarbled) and Rs 31,200 (MG 1) a quintal.

Published on September 11, 2011

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