Bulls still control pepper

Pepper futures continued to remain in the control of the bulls cartel which has been able to push the prices of active contracts up last week.

In the domestic market, because of the high prices, the demand continued to remain thin and the end-users and industry were covering only hand to mouth. They are waiting for the new crop to arrive by mid-Dec.

The farmers/dealers were liquidating looking at the new crop which is estimated to be higher than that of the previous season.

Some have put it at 60,000-63,000 tonnes while some others have claimed it would be over 70,000 tonnes.

It believes that there would be a supply crunch in the coming days and that would drive the buyers to the cartel.

Hence, they believe the only available source is the cartel. Some of the investors were buying spot and depositing in the exchange and selling Nov and Dec.

About 110 tonnes of pepper were deposited on Nov 25, the trade sources claimed. The market was under the control of the bulls and, hence, the prices of active contracts moved up. Nov, Dec and Feb contracts increased by Rs 490, Rs 405 and Rs 90 respectively to the last traded price (LTP) at the weekend close of Rs 44,000, Rs 43,400 and Rs 38,970 a quintal.

Total turn over decreased by 3,516 tonnes during the week to close at 6,138 tonnes. Total open interest rose by 1,165 tonnes to 8,767 tonnes. Spot prices on buying support and in tandem with the futures market trend by Rs 300 a quintal to close at Rs 40,700 (ungarbled) and Rs 42,200 (garbled) a quintal.

Last week activities were limited because of the holidays. On the spot, the total arrivals last week stood at around 45 tonnes and the entire quantity was sold at Rs 410, Rs 415 and Rs 420 a quintal depending upon the quality and the high bulk density.

There was reportedly good demand for bulk density pepper. But, availability of this variety was very much limited, trade sources said.

No demand is expected from the international market as the Indian parity is over $2,000 above other origins.

Everybody is covering from Indonesia now as it was quoting asta grade pepper at lower rates. Lampong Asta was reportedly being offered at $6,500 a tonne.

Vietnam was offering asta grade at $7,000 a tonne. Vietnam has been selling its FAQ 500 and 550 GL pepper much. FAQ 500 GL is offered now at $6,100-6,200 a tonne.

Availability of pepper in Vietnam in 2012 is projected at 1,22,000 tonnes and of this it has already shipped out 93,684 tonnes leaving a stock of 28,316 tonnes as on Oct 1.

Once the Indonesian current crop exhausts the buyers would turn towards Brazil which is offering at $6,700 a tonne. Against this, Indian parity is at $8,500 a tonne and remained totally out priced.

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