Pepper declines on liquidation

Pepper futures dropped on Tuesday on liquidation by some of the players, following the introduction of 4 per cent margin.

Imposition of margin on long position holders resulted in many liquidating, while some had increased their position also. Therefore, there has been a positive trend on the open interest and yet the prices faced a fall, trade sources said.

There was also some selling pressure following stray sales of selected varieties at Rs 275-277 a kg of high range pepper, which also aided the price fall, market sources told Business Line .

Yesterday, the market shot up on rumours of default. Today, there was some default and they could get away by paying three per cent of final settlement price (FSP), they alleged.

“Some default is said to have taken place but the extent of quantity is not known,” they said.

The market witnessed high volatility and the prices moved up and down throughout the day and there was, in fact, an effort to pull down the market, they said.

May contract

May contract on the NCDEX dropped by Rs 330 to close at Rs 28,452 a quintal. June and July also fell by Rs 288 and Rs 268, respectively, to close at Rs 28,981 and Rs 29,507 a quintal.

Total turn over dropped by 644 tonnes to 25,683 tonnes. Total open interest increased by 227 tonnes, showing additional buying and yet the market declined.

May open interest fell by 259 tonnes to close at 10,488 tonnes.

Open interest for June and July increased by 465 tonnes and 10 tonnes, respectively, to close at 5,193 tonnes and 538 tonnes.

Spot prices remained unchanged at previous levels of Rs 26,800 (ungarbled) and Rs 27,600 (MG 1) a quintal on limited activities in the ready pepper.

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

Overseas trend

According to an overseas report, the market in Vietnam remained volatile with the prices there moving up by $50 a tonne today from that of yesterday.

Price indications were for 500gl at $5,800/5,750; 550gl at $6,100/6,050 and white pepper double washed was at $8,450/8,500 a tonne.

An International Pepper Community report said the “Global Pepper Market is looking at Vietnam and sourcing more quantity of pepper due to the expected short supply during the next six months.”

Due to the adverse climatic conditions and reported negligible carry over stock from last year's crop, and the exportable surplus from Indonesia during the current year, crop will be very limited.

Erratic rainfall and disease problems in India may result in further lowering of production by over 2,000 tonnes, compared to the projected figures, the report said.

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