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Pepper market on Monday declined on bearish sentiments and consequent liquidation/switching over after witnessing high volatility throughout trading.
Some of the investors holding validity expired stocks of farm grade pepper with them and against which they got October sales offered to release it at Rs 5 below the October delivery price following the drop in the difference between October and November delivery prices to below Rs 5 from Rs 8 in recent weeks.
This phenomenon has created a bearish sentiment in the market and the bear operators using this as a weapon tried to pull the market down.
The market witnessed, therefore, high volatility throughout and in the closing session there were said to be concerted efforts to push up and pull down the prices. There was, in fact, only switching over from October to November and December and hence, the total net open position was at just 15 tonnes. Total turnover increased by 1,310 tonnes to 6,240 tonnes, resultant mainly from the “circular trading” that took place at the closing session by one group to put the price higher and by the others to pull it down to the lowest levels, market sources told Business Line .
There was no selling pressure on the spot. Much of the domestic demand, albeit slack at the moment, is being met by supplies from the stockists from Delhi, Jaipur, Indore, Gwalior, Nagpur and so on at the current prices. Karnataka is also selling at Rs 343 - Rs347 a kg delivered anywhere in India.
This situation is facilitating the exporters to cover from the exchange to meet their overseas commitments, they said.
October contract on the NCDEX declined by Rs 140 to close at Rs 36,195 a quintal. November and December dropped by Rs 215 and Rs 225, respectively, to close at Rs 36,625 and Rs 37,100 a quintal.
Total turnover increased by 1,310 tonnes to 6,240 tonnes. Total open interest moved up by just 15 tonnes to 12,010 tonnes.
Oct open interest fell by 433 tonnes to 1,409 tonnes, while that of November and December increased by 327 tonnes and 100 tonnes, respectively, to 9,254 tonnes and 1,122 tonnes.
Spot prices on lack of activities ruled steady to close at Rs 34,200 (ungarbled) and Rs 35,700 (MG 1) a quintal.
Indian parity in the international market remained competitive at $8,000 a tonne (c&f), while other origins were reportedly above MG 1.
A report from Vietnam today indicated 500 GL at $7,650 a tonne and 550 GL at $8,050 all f.o.b. net to shippers.
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