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Pepper futures after witnessing a ‘tug of war' between the bulls and bears resulting in high volatility, slipped marginally and ended below the previous closing.
The bears, whose where asking as to who would take delivery of about 6,000 tonnes of pepper left with the exchange when only 10 working days were left, got into the driving seat and pulled the market slightly down. To counter this argument, the bulls were asking as to who would deliver the material.
Meanwhile, cash rich processor/exporters were buying spot and selling futures, mostly May, at Rs 14 a kg below the May delivery price. Some bought Rs 10 a kg below the April price also, and all are said to be processing it for depositing into the warehouse as the material cannot be sold in the international market because of the high price, market sources told Business Line .
Indian parity has gone up to $6,025 a tonne (c&f) and remained out priced because of the high market and strong currency factor, they said.
The farmers were now holding back expecting that the spot price would cross Rs 250 a kg.
Global market
In the international market, some lobbies were sending out bullish reports so as to enthuse the buyers to cover, but many are holding back. The reason attributed to the bullish sentiment is that Vietnam farmers are not selling, and hence there is going to be a squeeze in supply. But, according to the trade, the past experience is that Vietnam used to hold back initially so as to push up the price and then slowly release after mid-April.
At the same time, when the Indian parity has become out priced Indonesia and Brazil are said to be taking sales quietly and Indians are allegedly holding the umbrella to them, they said.
April contract on the NCDEX dropped by Rs 94 to close at Rs 25,636 a quintal. May and June declined by Rs 68 and Rs 91, respectively, to close at 26,049 and Rs 26,372 a quintal.
Total Turnover
Total turn over dropped by 1,276 tonnes to 13,131 tonnes. Total open interest increased by 324 tonnes to close at 13,612 tonnes, indicating some additional buying and yet the market dropped.
April open interest fell by 229 tonnes to 6,415 tonnes, while May and June increased by 461 tonnes and 81 tonnes, respectively, to close at 6,334 tonnes and 602 tonnes. It showed some switching over and some additional purchases.
Spot prices remained unchanged at previous levels of Rs 23,900 (ungarbled) and Rs 24,700 (MG 1) a quntal.
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