Pepper market crashed on circular trading on Wednesday, probably in retaliation by the bear operators, flooring all the active contracts.
The turnover soared by 487 per cent to 14,416 tonnes today while the total open interest increased by only 162 tonnes.
The turnover in December alone was at 14,796 tonnes. Consequently, long position holders will have to pay mark to market margin to the tune of Rs 9,55,84,000 in December, market sources told
They said the market opened on a firm note and at the highest price of the day at Rs 39,110 a quintal and traded with high volatility throughout all the sessions and the turnover was very high in the afternoon and closing session.
Prices touched the lowest level of Rs37,505 just before closing and slightly recovered and hence the last traded price was at Rs37,730. However, the closing price i.e., last 30 minutes average, was at Rs 37,615 a quintal.
Arrivals of farm grade pepper from the primary markets were at four tonnes and of this three tonnes were traded. As there were no sellers the primary market dealers were ready to buy pepper from the terminal market.
Meanwhile, hedgers who have sales on December contract and are holding farm grade pepper with them as stocks were offering at Rs 7 to 8 below the December prices instead of going for processing and converting them into garbled material, they said.
Domestic market is said to have become active and demand was trickling in from Monday onwards. Upcountry dealers were said to be buying from the hedgers, they said.
December contract on the NCDEX decreased by Rs 1,450 a quintal to close at Rs 37,615 a quintal while February and March fell by Rs 1,370 and Rs 1,420 respectively to close at Rs 34,910 and 34,390 a quintal.
Turnover
Total turnover soared by 14,416 tonnes to close at 17,373 tonnes. Total open interest went up by 162 tonnes to 8,125 tonnes.
December open interest moved up by 54 tonnes to close at 6,592 tonnes when the turnover of December stood at 14,796 tonnes. February open interest declined by 11 tonnes to close at 1,161 tonnes while that of March increased by 98 tonnes to 316 tonnes.
Market sources said that it was not a healthy sign and urged the Regulator to look into the happenings in the market.
Spot prices fell in tandem with the futures market by Rs 1,000 a quintal to close at Rs 37,200 (ungarlbed) and Rs 38,700 (garbled) a quintal.
Indian parity in the international market also decreased to $7,100 a tonne (c&f) Europe and $7,400 a tonne (c&f) to the US. If the exchange rates remained favourable, at the current parity some overseas demand might come for Malabar, the trade claimed.