Pepper recovers on buying support

Pepper futures recovered on Wednesday on good buying support amid limited supply and bullish activities, with all contracts moving up from the previous closing.

The market witnessed high volatility. The May delivery touched the lowest price of the day in the afternoon session, and then moved up to end above the previous day's closing.

Good additional purchases were seen in June. The default reported yesterday were being sorted out by the brokers, market sources told Business Line .

They said the bearish reports appeared on international Web sites today blaming speculative activities and it appears to have activated the bulls here to push up the market.

The announcement made by the Union Minister of State for Agriculture, Prof K. V. Thomas, to provide financial assistance to farmers for their merchandises stored in the warehouses at low interest rates and financial support for constructing warehouses for agricultural commodities, also activated the bulls who felt it would also benefit the futures trading, they said.

However, the trade said such new warehouses should have the quality to store the commodities grown in the State, considering the climatic conditions of the State.

Small quantities were traded on the spot at Rs 269-275 a kg depending upon the quality of area of production.

Enquiries from international traders based in Europe for MG1 at competitive price also aided the price rise. Since the Indian produce is considered to be qualitatively superior, there are chances for MG1 even if the price remains marginally above other origins, they claimed.

May contract

May contract on NCDEX was up by Rs100 to close at Rs 28,552 a quintal.

June and July moved up by Rs 116 and Rs 114, respectively, to close at Rs 29,097 and Rs 29,619 a quintal.

Total turn over fell by 9,771 tonnes to 15,912 tonnes showing limited activities.

Total open interest increased by 603 tonnes to close at 17,052 tonnes indicating good additional purchases.

May open interest dropped by 113 tonnes, while that of June and July moved up by 681 tonnes and 30 tonnes, respectively, to 5,894 tonnes and 568 tonnes.

Spot prices on buying support moved up by Rs 100 to close at Rs 26,900 (ungarbled) and Rs 27,700 (MG 1) a quintal.

Indian parity in the international market was at $6,700 a tonne (c&f) and remained competitive.

The buyers are all waiting for the Vietnam prices to decline as it has shown a softer trend today, they said.

Overseas trend

According an overseas report, Vietnam pepper prices were slightly softer with market indications at 500gl at $5,650/$5,700 a tonne (fob); 550gl at $5,950/$6,000 a tonne (fob). White double washed was at $8,350 a tonne.

Another report said Brazil pepper market was dull so far on Wednesday; exporters were complaining about little activity/buying/selling interest! Price indications were for B Asta $6,300 a tonne (fob) Belem; B1 560 $6,200 a tonne and B2 $6,100 a tonne (fob) Belem.

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