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Pepper prices on Monday slipped on liquidation and reports of some selling pressure and also because the March contract is maturing on Tuesday.
Validity of some 587 tonnes of pepper is expiring on April 4 and the people won't be able to carry forward further, the trade claimed saying that the reprocessing will cost them Rs 15-17/kg and, hence, they liquidated.
Fearing delay in getting refund, investors also kept out of the market despite the good premium for next delivery April. “In fact, there was competitive and attractive badla”, market sources told Business Line .
They said that there was some selling pressure in Wayanad where pepper from Coorg was slipping in. However, the crop in Karnataka is also claimed to be lower by 20 per cent.
The trade sources alleged that the raising of VAT from 4 per cent to 5 per cent on spices was not needed. Since the prices of pepper, cardamom etc., are ruling high, the revenue levied at 4 per cent now is at higher levels.
And the increase will only lead to increased tax evasion as there is no tax levied on pepper in neighbouring Tamil Nadu, they pointed out.
Internationally Indian pepper is out priced and the only possibility at present is only the domestic market, they said.
March contract on NCDEX dropped Rs 660 to the last traded price of Rs 41,325 a quintal. April and May declined Rs 235 and Rs 70 respectively to the LTP of Rs 43,875 and Rs 44,750.
Total turnover increased 683 tonnes to 8,943 tonnes. Total open interest dropped 154 tonnes to 9,974 tonnes indicating liquidation.
Open interest in March, which is maturing tomorrow, declined 73 tonnes to 446 tonnes while that of April dropped 189 tonnes to 7,086 tonnes. May moved up 71 tonnes to 2,001 tonnes.
Spot prices in tandem with the futures market trend dropped Rs 600 to close at Rs 40,300 (ungarbled) and Rs 41,800 (MG 1) a quintal.
Indian parity in the international market was at $8,750 a tonne (c&f) for Europe and $9,050 a tonne (c&f) for the US and remained outpriced.
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