Pepper market after remaining hot till mid-last week on strong buying support amid limited supply fell sharply in the later days of the week when bear operators pulled the market down citing slack domestic demand. However, it bounced back on Saturday with all active contracts hitting double upper circuit levels on good buying support and bullish activities. Bull operators managed to get into the driving seat on Saturday.

In fact, slow down in domestic demand after an estimated 600 tonnes of pepper had reached some of the north Indian centres becomes insignificant when one compares it with the monthly peak season demand of 4,000-5,000 tonnes a month. Those who had commitments to overseas and domestic buyers were covering on Friday. There was strong buying support and yet the market dropped. Fundamentally, there was a squeeze in supply and that is evident from the rate of arrivals which should have been much more these days. During this time of the season, the arrivals used to be around 300-400 tonnes a day.

Whereas, it was around 25-30 per cent of it only, trade sources told Business Line . There was no selling pressure visible in major growing areas of Kerala even now. Any improvement in availability would depend on the current crop in Karnataka where harvesting has begun in Chikmagalur and some other areas. But the crop there is also reportedly not much.

High fluctuation coupled with tight supply position is said to be putting exporters in difficulties. All the active contracts increased significantly with rise in all the deliveries on Saturday. March, April and May contracts went up by Rs 2,420, Rs 2,530 and Rs 2,380 respectively to close at Rs 38,650, Rs 37,750 and Rs 37,755 a quintal.

Total turnover increased by 36,184 tonnes during the week to close at 86,762 tonnes. Total open interest went up by 2,894 tonnes showing good additional purchases in the week.

Spot prices on good demand and in tandem with the futures market trend increased by Rs 2,400 to close at Rs 36,800 (ungarbled) and Rs 38,300 (MG 1) a quintal.

Indian parity in the international market remained out-priced.

Overseas trend

Other origins follow meticulously what happens in the futures trading in India and now in Singapore. Every fluctuation in the prices is reflected on the prices in other origins, especially Vietnam.

“The Indian market for black pepper surged and Indonesia and Vietnam rode the coattails higher,” a report said on Saturday. There were aggressive bookings, as buyers finally came to the table, accepting the “competitive” Vietnamese and Indonesian offers. “At the week's close we are seeing a correction, but it seems technical in nature as the buyers who were ready to step up seem done at this point and sellers are trying to fish out the few remaining interests. There were dramatically different reports coming from Vietnam, with some sellers now reporting substantial crop damage. Whether true or not, the current main concern is that sellers there are definitely holding back from offering quantities and that is fuelling the market”. For white, levels are such now that both Indonesia and Vietnam are making offers.

Prices quoted in dollar per tonne C&F New York were: MG1 Asta – 8,125-8,225; Vietnam Asta–7,500; Lampong Asta – 7,475; Brazil Asta – 7,100-,150 (fob); MLV Asta – 8,000 ex warehouses New York/New Jersey.

White pepper

Muntok white – 9,950-10,200 ; Vietnam double washed white – 9,875-9,900.

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