Pepper futures continued to remain a platform for exhibiting the strength of bull and bear operators. Consequently, last week also prices were fluctuating heavily every day. On Monday last, the market fell sharply and that continued on Tuesday with nearly double flooring of all the active contracts. This trend was reversed with marginal rise on Wednesday and then pushed up next day to significantly higher levels touching nearly the double ceiling, to be pulled down on Friday.

These kind of activities on the exchange platform have puzzled both exporters and overseas buyers.

All other origins were reportedly firm last week as there was said to be some squeeze in availability at present and till the new Vietnam crop hits the market. In India the new crop arrival is yet to pick up. Those who have covered huge quantities last year at around Rs 200 a kg are reported to have liquidated their stocks at above Rs 300 a kg in recent weeks. They might be wanting to buy to replenish their stocks at lower rates now, at a time when the new crop harvesting is under way in Kerala.

But, the availability of high bulk density pepper might continue to remain in the hands of rich growers and primary market dealers who can afford to hold back for longer periods may not part with their produce at lower rates.

Buying of light berries by the industry coupled with coverage by upcountry dealers directly from the farmers/primary market dealers was also squeezing the arrivals at the terminal market. At the same time, one has to remember that the Indian total output is projected at around 43,000 tonnes and the domestic market is claimed to have the strength to absorb around 40,000 tonnes a year.

The Brazilian crop according to the IPC projections is at around 35,000 tonnes while the trade has estimated it at 30,000 tonnes. According to the trade, it has reportedly exported 20,000 tonnes of pepper during Aug-Dec 2011, while the country's domestic consumption was put at around 6,000 tonnes. Vietnam and Indonesia are said to be closely following the Indian futures market and accordingly keeping prices flexible.

During the last week all contracts fell sharply. January, February and March contracts fell by Rs 1,110; Rs 1,130 and Rs 1,030 respectively to close at Rs 30,600, Rs 30,975 and Rs 31,150 a quintal.

Total turnover increased by 10,944 tonnes to close at 33,501 tonnes, whereas total open interest during the week declined by 71 tonnes to 9,206 tonnes.

Spot prices were also brought down by Rs 1,100 a quintal to close at Rs 30,100 (ungarbled) and Rs 31,600 (garbled) a quintal despite no selling pressure. Small quantities of new pepper started arriving at the terminal market from southern and central districts of Kerala,

Overseas trend

Prices quoted for different origins in rupees per tonne (c&f) New York were MG 1 Asta – $6,800 – 6,900; Lampong Asta – $6,500; Vietnam Asta $6,500; Vietnam Asta steam sterilized $6,800. There were no quotes for Brazil Asta.

White pepper prices in dollar per tonne (c&f) New York for different origins were: Sarawak blue label - $10,100; Sarawak cream laber - $14,200; Muntok/Vietnam - $9,300-$9,350. The buyers were reportedly looking for to buy at $9,000 or lower.

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